Gold prices continued to fall on Monday as concerns mounted over the possibility of higher U.S. interest rates following a strong employment report. At the same time, renewed hostilities in the Middle East pushed oil prices higher, fueling inflation worries.
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Spot gold fell 0.4% to $4,313.11 per ounce as of 03:02 GMT.
The precious metal had already dropped nearly 3% on Friday, marking its lowest level since March 24.
U.S. gold futures for August delivery declined 0.7% to $4,336.30 per ounce.
Kelvin Wong, Senior Market Analyst at OANDA, said the market’s recent moves were largely driven by expectations of a more hawkish stance from the U.S. Federal Reserve. He added that rising Treasury yields were exerting additional pressure on gold prices.
The yield on benchmark 10-year U.S. Treasury bonds increased after reaching its highest level in two weeks during the previous session, raising the opportunity cost of holding non-yielding assets such as gold.
Meanwhile, Israel said it had struck military targets in western and central Iran on Monday, despite U.S. President Donald Trump’s call for Israeli Prime Minister Benjamin Netanyahu to refrain from further military action.
Oil prices surged by more than $3 per barrel, intensifying concerns over inflation and the prospect of higher interest rates.
Although gold is traditionally viewed as a hedge against inflation, higher interest rates generally weigh on the precious metal because it does not generate income.
Among other precious metals, spot silver fell 0.4% to $67.56 per ounce, platinum declined 0.5% to $1,767.15 per ounce, while palladium was little changed at $1,225.66 per ounce.
Source: Reuters
