Gold edges higher from over one-and-a-half-month low but higher yields cap gains

Gold edged higher on Monday (May 18, 2026) ​from a more than one-and-a-half-month low hit earlier ⁠in the session, although gains were capped as rising fears of inflation and elevated interest rates pushed global bond yields higher.

Spot gold was up ‌0.2% at $4,546.04 per ounce, as of 09:07 GMT (Greenwich Mean Time), after hitting its lowest level since March 30 earlier in ‌the session. U.S. gold futures for June delivery lost 0.3% ‌to $4,549.70.

“The ⁠decline (in gold prices) is technically stretched, and markets don’t ⁠seem ready to let gold drop into a bear territory as the structural case for gold remains intact, helping it find support,” said Nikos Tzabouras, a ​senior market analyst at Jefferies-owned ‌Tradu.com.

However, “with markets pricing out any Federal Reserve rate cuts (this year) and hike bets on the rise, higher-for-longer prospects are dealing a direct blow to non-yielding assets like gold,” he added.

Bonds from ‌Tokyo to New York extended losses on Monday (May 18, 2026), with benchmark ​10-year U.S. Treasury yields climbing to their highest since February 2025, as rising energy prices from the ongoing ⁠West Asia war fanned inflation fears and stoked investor wagers on rate hikes from global central banks.

Brent crude oil rose above $110 ‌a barrel as efforts to end the Iran war appeared to have stalled, keeping the key waterway of the Strait of Hormuz largely closed.

Traders are now increasingly pricing in a U.S. interest rate hike before year-end, with a 40% chance of a hike in December, according to Chicago Mercantile Exchange (CME) Group’s FedWatch tool. Meanwhile, ‌banks have started trimming their near-term gold price forecasts due to softer investor ​demand, with J.P.Morgan among the first major lenders to cut its 2026 average gold price forecast to $5,243 per ⁠ounce from $5,708.

“While the coming weeks could still be quite volatile over the ⁠twists and turns in negotiations and interest rate repricing, this resolution (to U.S.-Iran war) is key to beginning to re-stoke ‌investor interest and demand for gold,” analysts at the bank noted.

Spot silver rose 0.1% to $75.99 per ounce, platinum was steady ​at $1,973.32, and palladium was up 0.3% at $1,416.55.