2022.05.0918:01:00UTC+00Gold Futures Settled Lower On Monday

Gold prices drifted lower on Monday as demand for the yellow metal dropped amid rising prospects of further rate hikes by global central banks to combat soaring inflation.

The dollar's somewhat steady performance weighed on gold prices. The dollar index, which climbed to a fresh 20-year high at 104.19 in the Asian session, dropped into the red in early New York session, but recovered subsequently to around 104.00 before losing its way again.

The yield on U.S. 10-year bonds rose to 3.18% for the first time since November 2018, amid rising expectations of tighter polcy by global central banks.

Gold futures for June ended lower by $24.20 or about 1.3% at $1,858.60 an ounce, recording the biggest decline in percentage terms in about a week.

Silver futures for July ended down by $0.547 at $21.820 an ounce, while Copper futures for July settled at $4.1935 per pound, down $0.0735 from the previous close.

Germany's 10-year bond yield hit a new highest level since 2014 after hawkish policymaker Robert Holzmann said on Saturday that the ECB should hike interest rates three times this year to combat inflation.

Although Federal Reserve Chair Jerome Powell said last week that a 75-bps rate hike is not under active consideration, several analysts are of the view that the central bank would need to take a more drastic action to curb soaring inflation. Markets appear to be expecting further 200 bps hike in interest rate before the end of this year.