Reduced geopolitical risks push gold to a more than 2-week low

Gold prices fell to a more than two-week low on Tuesday as easing concerns of an escalation in the Middle East crisis triggered profit-taking after a recent rally.

Spot gold GOLD fell 1.0% to $2,303.59 per ounce by 1203 GMT. Gold, silver and palladium touched their lowest since April 5 earlier in the session, while platinum hit a three-week low.

"Gold's aggressive rally since the mid-February low is currently being challenged with bullion suffering a long overdue and relatively aggressive, but healthy correction," Ole Hansen, head of commodity strategy at Saxo Bank, said.

Gold dipped 2.7% on Monday, which was its biggest intraday fall in 22 months. Its March-April rally drove the precious metal up by almost $400 to an all-time high of $2,431.29 on April 12.

The correction "will help determine the real level of underlying demand besides momentum and managed money accounts ... and will reduce longs should the technical and/or fundamental picture change," Hansen said.

From a technical point of view, the key area of support for gold using Fibonacci retracement levels stands at around $2,255-2,260.

Meanwhile, two crucial sections of gold demand - purchases by central banks and physical demand in top consumer China - remain firm and continue providing support to the precious metal.

In another supportive factor, global physically-backed gold exchange traded funds saw first weekly net inflows since the end of 2023 last week as rising holdings in the North America and Asia offset outflows in Europe, according to the World Gold Council.

Under pressure from gold's correction, spot silver XAGUSD1! fell 0.8% to $26.99 per ounce. The gold-silver ratio (XAU-XAG) rose to 85 ounces of silver to an ounce of gold from 82.5 in mid-April.

Platinum PL1! dipped 1.2% to $905.90, and palladium XPDUSD1! dropped 1.4% to $995.00 as they followed gold and were also under pressure from rising market share of electric vehicles.

More than one in five cars sold globally is set to be electric in 2024, the International Energy Agency said on Tuesday.