Gold Yield Pressure

 

Gold Prices Hit 1.5-Month Low as Rising Bond Yields Pressure Market

Gold prices fell to their lowest level in one and a half months during Asian trading on Monday, as surging global bond yields and escalating tensions between the United States and Iran weighed heavily on the precious metal market.

Spot gold declined 1.3% to $4,483.67 per ounce at 07:44 GMT, hovering near its weakest level since late March. Meanwhile, gold futures dropped 1.7% to $4,484.82 per ounce.

The decline in gold prices comes amid a sharp rise in government bond yields across major economies, as investors grow increasingly concerned about inflationary pressures fueled by the prolonged Middle East conflict.

The benchmark 10-year U.S. Treasury yield climbed to a one-month high, while Japan’s 10-year government bond yield surged to its highest level in 29 years on Monday.

Bond yields have risen sharply due to growing speculation that energy-driven inflation linked to the Iran conflict could force central banks worldwide to maintain higher interest rates and adopt a more hawkish monetary policy stance.

Higher interest rates typically reduce the appeal of non-yielding assets such as gold, as they increase the opportunity cost of holding the precious metal.

The U.S. dollar also strengthened on these expectations, adding further pressure to the broader metals market. Spot silver fell 1.9% to $74.5840 per ounce, while spot platinum slipped 0.3% to $1,972.05 per ounce.

Geopolitical tensions between Washington and Tehran remained elevated after President Donald Trump warned that “time is running out” for Iran to accept a peace agreement.

Reports also suggested that the United States and Israel are considering additional military actions against Iran, particularly as negotiations surrounding a potential peace deal continue to show limited progress.

Trump’s recent summit discussions in China also failed to deliver any significant breakthrough regarding the Iran issue.

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Gold Futures Fall

 

Gold Futures Decline During Asian Trading Session

Gold futures traded lower during the Asian session on Friday, pressured by a stronger US dollar and weaker sentiment across the commodities market.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were trading at USD4,588.97 per troy ounce at the time of writing, down 2.06%.

The precious metal previously touched an intraday low during the session. Analysts expect gold to find support at USD4,584.95, while resistance is projected near USD4,783.40.

Meanwhile, the US Dollar Index Futures, which tracks the performance of the greenback against a basket of six major currencies, rose 0.30% to USD99.02.

In other metals trading on Comex, silver futures for July delivery plunged 5.52% to USD80.62 per troy ounce. Copper futures for July delivery also weakened, falling 2.84% to USD6.39 per pound.

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Indonesia Gold Surge

Indonesia Gold Demand Surges 47% to 23.6 Tons in Q1 2026 Amid Rising Safe-Haven Interest

The World Gold Council (WGC) reported a sharp increase in gold demand in Indonesia during the first quarter of 2026, driven by growing investor interest in gold as a safe-haven asset.

According to Shaokai Fan, retail investors worldwide have been attracted by strong gold price momentum and the metal’s appeal as a hedge against economic uncertainty. This trend pushed global demand for gold bars and coins up 42% year-on-year (YoY) to 474 tons in Q1 2026.

China recorded the largest jump, with gold demand soaring 67% YoY to a record 207 tons, far exceeding the previous quarterly high of 155 tons set in Q2 2013.

Other Asian markets, including India, South Korea, and Japan, also posted significant growth in gold bar and coin purchases. The rising demand reflects an ongoing structural shift in the global gold market, supported further by stronger demand in the United States and Europe, where purchases increased 14% and 50%, respectively.

“In Indonesia, demand for gold bars and coins surged 47% annually to 23.6 tons. This increase reflects the global trend where gold’s status as a safe-haven asset attracts investors concerned about economic uncertainty and inflation,” Shaokai said during a press conference on Wednesday (May 13, 2026).

Shaokai explained that historically, gold has proven to be one of the most reliable crisis hedging instruments for Indonesian investors. During the 1997–1998 Asian financial crisis, gold helped preserve purchasing power as the rupiah sharply depreciated. Similar patterns have repeatedly emerged during periods of currency weakness and market stress.

The WGC also noted that in 2025, gold outperformed most domestic and global equities, as well as rupiah-denominated bonds. In Q1 2026 alone, gold prices climbed 14% in rupiah terms, while Indonesia’s domestic stock market corrected by 13%.

Beyond crisis periods, gold has continued to deliver stable long-term returns, averaging approximately 15% annual growth in rupiah terms over the past two decades.

“WGC analysis shows that allocating just 2.5% of an Indonesian investor’s portfolio to gold can improve portfolio quality by reducing concentration risk and strengthening diversification,” Shaokai added.

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