By: Economy Middle east

Gold prices rose back above $4,500 after falling to a 1.5-month low on Monday as global yields rose and persistent tensions in the Middle East continued to weigh on precious metals.

As of 5:10 GMT, spot gold was up 0.10 percent to $4,535.73 after falling below the $4,500 mark and inching closer to its lowest level since late-March. Meanwhile, U.S. gold futures for June delivery fell 0.30 percent to $4,548.32.

In the UAE, gold rates edged higher, with 24-carat gold and and 22-carat gold gaining a marginal AED0.25 to AED547.25 and AED506.75, respectively.

Additionally, 21-carat gold and 18-carat gold rose AED0.25 to AED486 and AED416.5, respectively.

Meanwhile, 14-carat gold rose AED0.25 to AED325.

Bond yields rise as inflation concerns persist

Gold prices stayed under pressure as bond yields climbed sharply across major economies, with investors increasingly concerned about the inflationary consequences of a prolonged Middle East conflict. U.S. 10-year Treasury yields hovered near a one-month peak, while Japan’s 10-year government bond yields hit their highest level in 29 years on Monday.

The rise in yields reflects mounting expectations that higher energy prices linked to the Iran war will fuel inflation and prompt central banks worldwide to maintain a more hawkish stance on interest rates.

That outlook is generally negative for gold prices, as higher interest rates raise the opportunity cost of holding the non-yielding precious metal.

Gold falls as dollar strengthens

In addition, the U.S. dollar index, which tracks the greenback against a basket of other major currencies, rose 0.06 percent to 99.34, further pressuring gold prices.

Tensions between the United States and Iran remained elevated, with President Donald Trump warning that time was running out for Tehran to agree to a peace deal. Washington and Israel were also seen weighing fresh military action against Iran as negotiations showed little sign of progress. Trump’s summit in China likewise failed to deliver any meaningful breakthrough on the Iran issue.

Other precious metals

As gold prices posted a modest recovery, the broader precious metals market remained under pressure. Spot silver fell 0.66 percent to $75.45, while platinum dipped 0.13 percent to $1,970.80. Finally, palladium fell 1.06 percent to $1,397.50.