Global Rate Hikes Weigh on Gold Prices

Gold prices slipped in early Asian trading on Monday as new tensions in the Middle East lifted inflation worries, but a string of central-bank moves reinforced the idea that interest rates may stay higher for longer.

The Bank of Japan's surprise tightening policy on Friday followed the Federal Reserve's hike earlier in the week and the European Central Bank's hike the week before. This cluster of rate hikes can reset global bond yields upward, making it more costly to hold gold.

Gold tends to perform well in uncertain markets with high inflation expectations, but its value is directly tied to interest rates. When government bonds pay more, the opportunity cost of holding gold rises because bullion doesn't generate interest like cash and Treasuries do.