Gold Declines as Investor Focus Shifts Back to US Treasury Bonds

Gold prices slipped at the start of Monday’s trading session, driven by renewed investor interest in US Treasury bonds, which saw increased demand at the beginning of the new week. This resurgence follows a period of waning confidence in bonds as one of the safest assets in global financial markets.

Futures contracts for gold dropped to $3,223 per ounce, down from the previous session’s close of $3,254 per ounce. During Monday’s trading, gold reached a high of $3,261 per ounce and a low of $3,208 per ounce.

Meanwhile, the US dollar continued its decline on Monday, reflecting ongoing erosion of confidence in US assets traded on global markets, particularly the currency of the world’s largest economy. This weakness stems from recent trade disputes sparked by US policies.

Typically, an inverse relationship exists between the US dollar and gold, but this dynamic did not fully materialize during Monday’s session, the first trading day of the week. This anomaly highlights a significant reduction in risk appetite, fueled by uncertainty surrounding US trade policies.

Last Thursday, gold futures achieved an unprecedented surge, driven by diminished confidence in the US dollar amid escalating trade tensions between the United States and several countries, particularly China. In that session, gold futures closed at $3,174 per ounce, up from the prior day’s close of $3,099 per ounce.

The precious metal’s rally didn’t stop there. On Friday, gold continued its upward trajectory, reaching a new all-time high of $3,254 per ounce after gaining approximately 2.00% over the previous day’s close, underscoring its appeal as a safe-haven asset amid ongoing market uncertainties.