Gold prices decrease as the dollar and yields strengthen after the release of US retail sales data

Gold prices took a hit on Monday as the dollar strengthened and U.S. Treasury yields rose following an unexpected increase in retail sales in March. Spot gold saw a 0.5 percent decline, dropping to $2,332.97 per ounce. The strengthening dollar and rising Treasury yields have raised concerns that the Federal Reserve might delay interest rate cuts for the year.

The dollar experienced a 0.1 percent uptick, while 10-year Treasury yields reached a five-month peak. These movements were driven by data showing that U.S. retail sales exceeded expectations in March, indicating a strong end to the first quarter for the economy.

Last week, gold prices surged to an all-time high of $2,400 amidst growing tensions in the Middle East. The anticipation of U.S. intervention in the Israel-Iran conflict fueled the rise in prices. The market is closely watching for any developments in this geopolitical situation, as any escalation could result in an increased demand for safe-haven assets like gold.

Meanwhile, spot silver experienced a 1.3 percent increase, reaching $28.23, following its nearly three-year peak in the prior session. Platinum declined by 1.1 percent to $963.40, while palladium saw a decrease of 2.4 percent, settling at $1,024.37.

Market analysts are keeping a close eye on the geopolitical developments in the Middle East and incoming data from various regions for clues on the central bank’s rate cut path. The current focus remains on the tensions in the region, with gold prices seen as stuck in a range. Further clarity on the situation and any potential escalation could drive a rise in demand for safe-haven assets.