Source: Kapitales Research

Highlights:

• Gold prices extended losses as rising oil prices and Middle East tensions intensified inflation concerns
• Expectations of prolonged higher borrowing costs and stronger bond yields weighed on bullion prices.
• ASX-listed gold miners including NST, EVN and NEM fell sharply as weakness in gold prices weighed on sentiment

Gold prices remained under pressure on Monday as persistent tensions in the Middle East and uncertainty surrounding the Strait of Hormuz continued to rattle global markets, intensifying concerns over inflation and interest rates.

Spot gold traded near US$4,540 an ounce after earlier falling to its lowest level in more than a month. The precious metal has now declined sharply from recent highs, with investors reassessing the outlook for safe-haven assets amid surging oil prices and rising bond yields.

Oil Shock Revives Inflation Concerns

Investor sentiment remained cautious as negotiations between the United States and Iran showed limited signs of progress, while continued disruption in the Strait of Hormuz — a critical global oil transit route — kept markets on edge. The prolonged disruption has pushed oil prices higher and reignited fears of another inflationary wave across global economies.

Market fears deepened following reports that a drone strike sparked a fire at a nuclear facility in the United Arab Emirates. Saudi Arabia also reportedly intercepted multiple drones, highlighting the fragile geopolitical environment in the region.

The renewed energy shock has triggered heavy selling in global bond markets, with yields climbing as traders increasingly expect central banks to maintain higher interest rates for longer. Rising yields typically weaken the appeal of non-yielding assets such as gold.

Gold Struggles Despite Safe-Haven Demand

Although gold traditionally benefits during geopolitical uncertainty, the current market dynamic has become more complex. Investors are weighing safe-haven demand against the negative impact of higher interest rates and stronger bond yields.

Analysts noted that gold’s near-term direction remains tied to inflation expectations and central bank policy. While some dip-buying emerged after bullion touched recent lows, the broader trend remains cautious.

According to market strategists, the metal is currently trading in a sideways range as investors wait for clearer signals on whether slowing global growth could eventually force policymakers to pivot toward interest-rate cuts.

Gold Stocks Slide on ASX

Weakness in bullion prices also weighed heavily on major gold mining stocks listed on the ASX:

• Northern Star Resources Ltd (ASX: NST)  declined 3.5% to $19.775. 
• Evolution Mining Ltd (ASX: EVN) dropped 5.2% to $11.845
• Newmont Corporation (ASX: NEM) declined 4.4% to $150.470

The sharp declines reflected broader investor caution across the gold sector as commodity markets remained highly volatile.

Note- All data presented is based on information available at the time of writing.

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