Gold Slides Below $4,040 as Rates and Inflation Bites

Gold prices have extended their decline below $4,040, dropping to around $4,025 in Asia trading. This move has been driven by rising oil prices and firmer rate bets, outweighing the usual safe haven appeal of gold during times of conflict.

The metal had earlier touched a two-week high above $4,150 before reversing sharply, with spot gold now down more than 2% from its peak. Analysts attribute the decline to shifting expectations around inflation and interest rates rather than any easing of geopolitical tension.

Higher oil prices have strengthened inflation concerns, prompting investors to price in tighter monetary policy and pushing Treasury yields higher. This dynamic has repeatedly outweighed gold's traditional safe haven appeal through this conflict.