Gold Price Correction Driven by Rising Yields and Stronger USD
The gold price has been experiencing a correction since hitting a record high above $5,595/oz in late January 2026. According to JustMarkets, this decline is due to combined macroeconomic pressures. One key factor is the rise in real yields on US Treasury bonds.
This increase in interest rates makes non-yielding gold less appealing to investors. The higher yields also led to a stronger USD, which puts pressure on the XAU/USD pair as it becomes more expensive when purchased with other currencies.
Central banks were initially driving gold prices higher between 2025 and 2026, but their purchasing volume has become more erratic in recent times. The ongoing geopolitical tensions around the Strait of Hormuz have had a negative impact on gold, outweighing its typical safe-haven status.