Gold prices edge higher as rising yields and oil surge limit gains

Dubai: Gold edged higher on Monday after hitting a more than one-and-a-half-month low earlier in the session, although gains were limited as rising inflation concerns and elevated interest rates pushed global bond yields higher. Spot gold rose 0.2% to $4,546.04 per ounce as of 0907 GMT, after falling to its lowest level since 30 March earlier in the day. US gold futures for June delivery slipped 0.3% to $4,549.70. “The decline in gold prices is technically stretched, and markets do not appear ready to push gold into bear territory, as the structural case for the metal remains intact, helping it find support,” said Nikos Tzabouras, Senior Market Analyst at Jefferies-owned Tradu.com. However, he noted that “with markets pricing out any Federal Reserve rate cuts this year and expectations of rate hikes rising, the higher-for-longer outlook is dealing a direct blow to non-yielding assets such as gold.” Global bonds extended losses on Monday, with benchmark 10-year US Treasury yields climbing to their highest level since February 2025. The move reflects growing inflation concerns driven by rising energy prices linked to the ongoing Middle East conflict, which has also prompted expectations of further rate hikes by central banks. Brent crude oil rose above $110 per barrel, as efforts to resolve the Iran conflict appeared to have stalled, keeping the critical Strait of Hormuz—a key global oil transit route—largely constrained. Traders are increasingly factoring in a US interest rate hike before the end of the year, with a 40% probability of a move in December, according to CME Group’s FedWatch Tool. Meanwhile, several banks have begun trimming their near-term gold price forecasts amid softer investor demand. JPMorgan recently revised its 2026 average gold price forecast down to $5,243 per ounce, from $5,708 previously. “While the coming weeks may remain volatile due to shifting geopolitical developments and interest rate repricing, a resolution to the US-Iran conflict will be key to reviving investor interest and demand for gold,” analysts at the bank said. Among other precious metals, spot silver rose 0.1% to $75.99 per ounce, platinum held steady at $1,973.32, and palladium gained 0.3% to $1,416.55.