Gold prices continued to decline on Monday, as fears of a rise in interest rates in the United States increased following the release of a strong jobs report, and renewed hostilities in the Middle East pushed oil prices higher and raised concerns about inflation. The price of gold in spot transactions fell 0.4 percent to $4,313.11 per ounce by 03:02 GMT. Prices fell by about three percent on Friday, hitting their lowest level since March 24. US gold futures for August delivery fell by 0.7 percent to $4,336.30. “It all depends on the hawkish sentiment that the market is starting to put on Federal Reserve futures,” said Kelvin Wong, chief market analyst at OANDA, adding that rising Treasury yields are putting further pressure on gold. The yield on standard 10-year US Treasury bonds rose after jumping to its highest level in two weeks in the previous session, increasing the opportunity cost of holding the non-yielding precious metal.
Oil prices rose by more than $3 per barrel, raising concerns about inflation and raising interest rates.
While gold is seen as a hedge against inflation, rising interest rates tend to negatively impact the non-yielding metal. As for other precious metals, the price of silver in spot transactions fell 0.4 percent to $67.56 per ounce, platinum fell 0.5 percent to $1,767.15, while palladium stabilized at $1,225.66.
