Gold traded below $4,550 per ounce on Monday, extending losses after last week’s near 4% drop as global markets reassessed the balance between inflation risks and monetary tightening expectations.
The metal remains under pressure from a strong US dollar and elevated US Treasury yields, following hotter-than-expected inflation data that has reinforced the view that the Federal Reserve will keep policy restrictive for longer, with rate cuts largely ruled out this year and growing speculation of further tightening.
At the same time, inflation concerns linked to the Middle East energy shock are feeding through global markets via higher oil prices, adding to the broader macro pressure backdrop.
However, this inflation channel is not supporting gold, as it is simultaneously strengthening expectations of tighter monetary policy, which tends to weigh heavily on non-yielding assets.
Geopolitical risk remains elevated, with US–Iran negotiations still deadlocked and tensions across the Persian Gulf persisting, including reports of renewed incidents involving key energy infrastructure. While such developments typically support safe-haven demand, their impact has been largely overshadowed by the dominance of dollar strength and rising yields.
The result is a market where gold is being pulled in opposite directions, supported by geopolitical uncertainty, but increasingly constrained by macroeconomic conditions that favour higher yields over safe-haven positioning.
