Gold dropped more than 1% to touch a two-week low on Tuesday, after President Donald Trump's announcement of a ceasefire between Israel and Iran diminished bullion's safe-haven appeal.

Spot gold was down 1.2% to $3,326.87 an ounce, as of 0852 GMT, after hitting its lowest level since June 11 earlier in the session.

U.S. gold futures slipped 1.6% to $3,339.40.

"Gold prices are trending lower today, driven by a shift towards greater risk appetite, as optimism grows over a potential end to hostilities in the Middle East," said Ricardo Evangelista, senior analyst at the brokerage firm ActivTrades.

"I don't believe that gold prices will fall below the $3,000 mark in the short term. I see a meaningful support level at $3,300."

Global stock markets surged and oil prices tumbled on Tuesday after the ceasefire announcement, in the hope it heralded a resolution of the war.

However, Israeli Defence Minister Israel Katz said on Tuesday he had ordered the military to strike Tehran in response to an alleged violation of the ceasefire.

Meanwhile, markets are awaiting Federal Reserve Chair Jerome Powell's testimony before the House Financial Services Committee later today. So far, Powell has remained cautious about signaling any near-term rate cuts.

Investors are currently anticipating 57 basis points worth of Fed rate cuts by the end of this year.

"Gold price is likely to consolidate before staging another rally toward $3,600/oz by year-end," ANZ said in a note.

"Longer term, we expect gold to peak later in 2025, followed by a gradual decline in 2026 as economic growth prospects improve and global trade uncertainty diminishes."

Elsewhere, spot silver eased 0.1% to $36.08 per ounce, platinum rose 1.4% to $1,312.58, while palladium slipped 0.6% to $1,070.49.

Source: Reuters