On Tuesday, gold prices fell to over two-week lows as fear of an escalation in the Middle East crisis prompted profit-taking following a recent rally.

Gold prices fell to over two-week lows as fear of an escalation in the Middle East crisis prompted profit-taking following a recent rally.

Spot gold dropped 1.1% to $2,301.14 per ounce. Gold, silver, and palladium touched their lowest since April 5 earlier in the session, while platinum hit its lowest in three weeks.

Gold plummeted 2.7% on Monday, its biggest intraday drop in 22 months. Its March-April rebound saw the precious metal surge nearly $400 to a record high of $2,431.29 on April 12.

From a technical standpoint, the key support zone for gold using Fibonacci retracement levels is around $2,255-$2,260.

Meanwhile, two crucial sectors of gold demand – central bank purchases and physical demand in China, the top consumer – remain robust and continue to provide support to the precious metal.

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

Pressured by gold’s correction, spot silver fell 1% to $26.92 per ounce. The gold-to-silver ratio rose to 86 ounces of silver per ounce of gold from 82.5 in mid-April.

Platinum declined 0.9% to $909.10, and palladium dropped 1.1% to $997.32 as they followed gold and were also pressured by the growing market share of electric vehicles.

According to the International Energy Agency, more than one in five cars sold worldwide will be electric by 2024.