Gold Retreats but Recovers from Three-Month Low as U.S. Yields Decline

By Gina Lee

Gold prices declined on Monday morning in Asia, following a downturn in the previous session. However, lower U.S. Treasury yields helped support demand for gold, keeping it above the $1,800 threshold.

As of 1:13 AM ET, gold prices slipped by 0.07% to $1,807.01.

According to Matt Simpson, senior market analyst at City Index, "$1,800 is a significant round number, so it’s expected to offer some level of support. Some traders might be taking the opportunity to buy on dips, while others might be closing out profitable short positions."

Gold marked its fourth consecutive weekly decline, falling over 1% last Friday to its lowest price since February 4, hitting $1,798.86, before closing at $1,811.15. Simpson noted, "The outlook doesn’t seem favorable for gold enthusiasts at the moment. Even if there’s a bounce back from $1,800, the momentum indicates potential further declines."

The U.S. dollar, which typically moves inversely to gold, also saw a minor dip on Monday, yet remained close to a 20-year high. Investors are gravitating towards the dollar amid concerns about economic growth.

Benchmark yields decreased, while Cleveland Fed President Loretta Mester stated on Friday that inflation needs to show sustained decline for several months before officials can confidently conclude it has peaked. She indicated a willingness to consider faster rate hikes at the September 2022 Fed meeting should the economic data not improve.

In other precious metal markets, silver decreased by 0.1%, platinum rose by 0.3%, and palladium remained steady at $938.46.