Gold Pulls Back as Rising Yields and Oil Prices Weigh on Demand

Gold and silver markets faced renewed pressure last week as rising inflation expectations and strong equity performance reduced the appeal of precious metals. Gold prices declined 3.3% to around US$4,712/oz, trimming year-to-date gains to roughly 8%. The pullback was largely driven by a surge in oil prices linked to ongoing disruptions in the Strait of Hormuz, which reignited inflation concerns and pushed bond yields higher.

The combination of elevated yields, a firmer US dollar, and record-setting equity markets prompted investors—particularly in the US—to reduce exposure to gold. This was reflected in outflows from gold ETFs, a reduction in futures net-long positions, and cooling bullish sentiment in options markets. Silver followed a similar trajectory, experiencing sharper declines due to its higher sensitivity to economic cycles and industrial demand.

Despite the recent weakness, gold continues to show signs of underlying stability. Prices are consolidating below key technical resistance near the 55-day moving average (around US$4,830–$4,880), suggesting a pause rather than a reversal in the broader uptrend. Support levels near US$4,644 remain critical, with deeper downside protection closer to the 200-day moving average around US$4,250.

Macro conditions remain the dominant driver. Major central banks, including the Federal Reserve, are expected to hold rates steady in the near term, placing greater emphasis on forward guidance—particularly regarding inflation risks tied to geopolitical tensions. Upcoming US GDP and inflation data could further shape expectations.

Overall, the precious metals complex appears to be entering a consolidation phase, with gold maintaining its long-term bullish structure while silver continues to amplify broader market movements amid ongoing macro uncertainty.