2023.10.1609:42:00UTC+00Gold Prices Decline As Yields Jump On Inflation Concerns

Gold prices declined on Monday as the dollar remained elevated on safe-haven bids and Treasury yields surged on inflation concerns.

Spot gold dropped 0.9 percent to $1,914.60 per ounce while U.S. gold futures were down 0.7 percent at $1,927.30.

The dollar index ease slightly but held close to highs touched on Friday ahead of U.S. reports on retail sales, industrial production, housing starts and existing home sales due this week.

Fed Chair Jerome Powell's upcoming speech at the Economic Club of New York also remain on investors' radar.

Federal Reserve Bank of Philadelphia President Patrick Harker said on Friday he believed the Fed is likely done with its tightening cycle, barring any sudden changes in data.

Treasury yields moved higher as Friday's spike in crude prices raised over inflation. It is feared that the Israel-Hamas war could spark a wider conflict in the oil-rich region and disrupt supplies from the Middle East.

Investors assessed the risk of any potential escalation of the conflict involving Iran ahead of an expected Israel ground offensive in Gaza against the terror attacks.

Iran warned on Saturday that failure to stop Israel's "war crimes and genocide" could have "far-reaching consequences."

The U.S. and its allies are ratcheting up efforts to prevent the war between Israel and Hamas from engulfing the wider region.