World gold prices on August 18 continued to maintain above the 4,400 USD/ounce mark after two consecutive increasing sessions, but turned down in the afternoon session as US government bond yields and oil prices increased.
Spot gold prices fell 0.33% to 4,402.39 USD/ounce. December gold futures fell 0.35% to 4,458.05 USD/ounce.
Gold prices are under pressure as 10-year US government bond yields continue to rise. This increases the opportunity cost of holding gold – an asset that does not yield yields.
According to Ms. Soni Kumari - an analyst at ANZ, oil prices will continue to be one of the factors putting pressure on gold as the situation in the Middle East still contains many instabilities.
Rising energy prices may increase concerns about inflation and strengthen expectations of high interest rates. Although gold is often seen as an inflation hedging tool, a high interest rate environment reduces the attractiveness of the precious metal.
This week, investors will follow the minutes of the Fed's July monetary policy meeting, scheduled to be released on August 19 US time, to look for more signals about interest rate prospects.
On other precious metals markets, spot silver prices decreased 0.73%, to 65.3015 USD/ounce. Platinum prices decreased 0.70%, to 1,760.87 USD/ounce, while palladium prices decreased 0.08%, to 1,327.75 USD/ounce.
Meanwhile, the energy market increased slightly. Brent oil futures for October reached 91.03 USD/barrel, up 0.18%, while WTI oil for October reached 84.13 USD/barrel, up 0.47%.
