Gold Price Plummets to Seven-Week Low on Surging Yields

The gold price plummeted to a seven-week low on Monday as US Treasury yields surged to their highest level since June 2007. The yield on ten-year US Treasuries climbed to 5.2%, causing the dollar to strengthen and pushing gold prices down by 3.9% to $4,120.49 an ounce.

This sharp reversal in sentiment comes after a recent decline in rate expectations, which had lifted gold prices earlier this year. However, the breakdown in US-Iran negotiations has reignited inflation concerns, leading to higher crude oil prices and a stronger dollar. As a result, central banks are expected to maintain a restrictive stance for longer.

UBS analyst Giovanni Staunovo attributed the decline in gold prices to firmer oil prices and growing odds of additional Fed hikes. He noted that hawkish Fed signals had already weighed on the metal, while real yields remain elevated and the greenback is firm.

Despite the short-term pressure, institutional demand for gold remains resilient. State Street Investment Management's Aakash Doshi cited continued interest from major players, noting that US-listed gold products pulled in $7.9 billion in August - the strongest monthly gain since September 2025. China's non-monetary imports also hit a record 1,000 tonnes across the first seven months of the year.