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Gold Prices Retreat as Global Bond Yields Surge Amid Middle East Tensions
yonhap_finance · 2026-09-02
Gold prices have turned downward as rising global bond yields and surging oil prices, driven by U.S.-Iran tensions, dampen the appeal of non-yielding assets.
What Happened
Gold Price Reversal: Gold prices have retreated from their recent upward trend, falling by 2.41% to 191,540 KRW per gram in the domestic market. This decline follows a period of growth that saw prices briefly exceed 200,000 KRW in late August.
Previous Rally Factors: The earlier rally was fueled by cooling U.S. inflation data, which led investors to anticipate a pause in Federal Reserve interest rate hikes. As gold is a non-yielding asset, the expectation of lower interest rates historically boosts its attractiveness to investors.
Geopolitical Impact on Yields: The recent escalation of military conflict between the U.S. and Iran has triggered a surge in international oil prices and renewed inflation concerns. Consequently, global bond yields have spiked, with the U.S. 10-year Treasury yield reaching its highest level since 2025 at approximately 4.79%.
Market Outlook: The combination of rising bond yields, higher oil prices, and a strengthening dollar index has created significant headwinds for precious metals. Analysts note that these macro factors are collectively exerting downward pressure on gold, reversing its recent gains.