Global gold prices tumbled sharply on Monday, hitting their lowest level in four months as rising geopolitical tensions and shifting interest rate expectations dampened investor demand for the precious metal.
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Spot gold fell more than eight per cent during the session, touching a low of $4,097.99 per ounce before recovering slightly to trade around $4,203.21. The decline extended a nine-session losing streak, marking one of the steepest drops in recent years.
The metal had already recorded its biggest weekly loss since 1983, falling over 10 per cent last week. Prices have now retreated roughly 25 per cent from their record high of $5,594.82 per ounce reached in late January. US gold futures also dropped significantly, reflecting continued bearish sentiment across global markets.
Analysts attribute the sharp decline to the ongoing conflict involving Iran and the United States, which has pushed oil prices above $100 per barrel and fueled inflation concerns. As a result, expectations have shifted away from interest rate cuts toward potential hikes by the Federal Reserve.
Higher interest rates tend to reduce gold’s appeal since it is a non-yielding asset. At the same time, a stronger US dollar and increased liquidity pressures have prompted investors to sell gold holdings to cover losses in other markets.
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The situation has been further exacerbated by disruptions in the Strait of Hormuz, a key global oil route, keeping crude prices elevated and adding to inflationary pressures worldwide.
Other precious metals also declined, with silver, platinum, and palladium all registering notable losses. Market experts warn that unless geopolitical tensions ease or interest rate expectations shift, gold could remain under pressure in the near term.