Gold price hits lowest level in one and a half months

Gold prices rose slightly in the global market today. Earlier, the price of this precious metal fell to its lowest level in more than one and a half months at the beginning of trading. However, this major increase in gold prices is being hampered by rising bond yields due to global inflation fears and high interest rates.
Today, Monday (May 18), at 09:07 GMT, spot gold or per ounce (31.103 grams) rose 0.2 percent to $ 4,547.04. Earlier in today’s session, gold prices fell to their lowest level since March 30. On the other hand, the price of the US gold futures market for delivery next month fell 0.3 percent to $ 4,549.70 per ounce.
Nikos Zaboras, senior market analyst at trading platform ‘Trade.com’, said that the fall in gold prices is temporary and market structural. The market is not yet ready to push gold into a bear market, as the structural foundations of gold are still strong. And this is what is helping to maintain the price in the market. However, he added that considering the current market situation, it is understood that the US central bank, the Federal Reserve (Fed), has almost ruled out the possibility of cutting interest rates this year. Instead, investors are betting on further increases in interest rates. This trend of high interest rates for a long time is directly hitting non-yielding (from which regular interest or dividends are not received) assets like gold.
On Monday, losses continued in bond markets from Tokyo to New York. The yield on the benchmark 10-year US Treasury bond reached its highest level since February 2025. The ongoing war in the Middle East has increased oil prices, which has increased inflation concerns around the world. That is why investors think that the world’s major central banks may raise interest rates further.
The Strait of Hormuz, one of the world’s most important waterways, has been largely closed as Iran stalls its efforts to end the war. As a result, Brent crude oil prices have surged above $110 a barrel. According to CME Group’s ‘FedWatch’ tool, traders are now pricing in a US interest rate hike by the end of the year. The chance of a rate hike in December is now around 40 percent.
Meanwhile, major banks have also started revising and lowering their gold price forecasts for the near future as investor demand has waned. JPMorgan, one of the leading investment banks, has cut its average gold price forecast for 2026 from $5,708 to $5,243 an ounce.
Analysts at the bank said in a note that the market could remain volatile in the coming weeks due to discussions about the war situation and fluctuations in interest rates. However, the key to restoring investor interest in the market and demand for gold is an end to the US-Iran war.
Among other precious metals in the international market, spot silver rose 0.1 percent to $75.99 an ounce, while platinum was unchanged at $1,973.32 and palladium rose 0.3 percent to $1,416.55.

Source: Reuters