Gold price dips as global Bond Yields rise, geopolitical factors in focus

The price of gold began the week on a modest decline, following a period of solid gains attributed to perceived haven demand, which had been counteracting the surging yields on government bonds worldwide.

As geopolitical tensions in the Middle East created uncertainty and weighed on growth and risk-oriented assets, such as equities, the fundamental macroeconomic environment has played a significant role in driving the recent rally in the precious metal.

The ongoing Israel-Hamas conflict remains a focal point for global observers, influencing sentiment in the gold market. The situation, however, has the potential to impact gold prices in the opposite direction if there are signs of easing tensions, especially when assessing technical factors.

Meanwhile, the world’s major bond markets are currently experiencing a tumultuous period, with the onset of a new era marked by expectations of higher interest rates that may persist for an extended duration.

In the United States, the benchmark 10-year Treasury bond yields have soared to levels not seen in 16 years. Germany, facing its own economic challenges, has also seen yields rise to their highest since the 2011 euro zone debt crisis. Even in Japan, where official interest rates remain below zero, bond yields have reverted to levels reminiscent of 2013.

At 11:30 GMT, spot gold was trading at $1,976.47, reflecting a modest 0.25% decline.

Despite the recent dip in gold prices, experts suggest that the market remains highly sensitive to geopolitical developments and the impact of rising bond yields.