Oil Price Surge Lifts Yields, Gold Prices Rise Amid Inflation Concerns
The price of gold and silver has risen in late-afternoon U.S. trading on Monday due to several factors. The weaker U.S. dollar and lower expectations for a Federal Reserve interest rate hike have supported precious metals.
However, the rally in crude oil prices has also lifted Treasury yields and put pressure on equities. North American equity markets closed lower as concerns about inflation were revived by the oil price surge.
The spot price of gold is trading near $4,414.30 an ounce, up 0.88%, while spot silver is trading at $65.650, up 1.66% on the session. The 10-year Treasury yield has risen to around 4.73%, which may cap the rally in gold prices.
The geopolitical situation surrounding oil supply is also a concern for investors. Tensions between the U.S. and Iran are ongoing, with talks stalled and tanker traffic through the Strait of Hormuz slowed. This has kept supply-risk premiums in the market, supporting shipping risk and defensive demand for gold.