Gold prices declined further on Monday as spot gold fell 8 percent to approximately $4,792 per ounce from its February peak amid sustained pressure from rising interest rates and a stronger U.S. dollar.
The latest decline reflects continued selling across the precious metals market despite heightened geopolitical tensions in the Middle East.
Traditionally, such instability supports gold prices, but current market conditions show a clear divergence driven by macroeconomic factors.
The U.S. dollar strengthened sharply during the session, making gold more expensive for international investors and reducing global demand.
At the same time, U.S. Treasury yields remained elevated, increasing the opportunity cost of holding gold, which does not offer interest returns.
Market participants are increasingly concerned about persistent inflation and the likelihood that major central banks, particularly the U.S. Federal Reserve, will maintain higher interest rates for longer.
This expectation has shifted capital flows away from safe-haven assets like gold toward yield-bearing investments.
The current price level near $4,792 per ounce represents a notable pullback from earlier highs recorded during the peak of geopolitical tensions in late February, when gold rallied strongly on safe-haven demand.
Since then, the market has repriced risk with inflation and monetary policy taking precedence over geopolitical uncertainty.
Analysts note that the market is undergoing a structural shift from safe-haven buying to rate-driven selling as investors adjust portfolios in response to tightening financial conditions and a stronger dollar outlook.
Physical demand has also weakened, particularly in key markets such as Asia, where elevated prices have reduced jewellery purchases and retail investment activity.
Despite ongoing geopolitical risks, gold’s inability to sustain upward momentum underscores the dominance of macroeconomic fundamentals in determining price direction.
Until inflation shows clear signs of easing or central banks shift toward a more accommodative stance, gold is likely to remain under pressure with prices anchored near current levels and vulnerable to further downside.