Gold Sinks To 7-Week Low As Treasury Yields, Fed Hike Bets Rise — Hansen Warns Bullion’s ‘Resilience’ Faces Its ‘Toughest Test Yet’

• Ole Hansen warned that rising credit stress could trigger further selling if investors turn to liquid assets such as gold to raise cash.
• Peter Schiff has urged investors to buy gold ‘now.’
• Spot gold fell 3% to around $4,156 per ounce, its lowest level since Aug. 5.

Gold prices tumbled to a seven-week low on Monday as surging U.S. Treasury yields, a stronger dollar and rising expectations for another Federal Reserve rate hike outweighed safe-haven demand from the ongoing Iran conflict.

At the time of writing, spot gold was down 3% to around $4,156 per ounce, its lowest level since Aug. 5, while gold futures for December 2026 deliveries dropped 3.1% to $4,186.70 an ounce.

Silver fell even harder, with spot prices down nearly 5% to around $61.17, while December 2026 contracts were down 4.8% at $61.7.

Why Is Gold Falling?

The selloff comes as U.S. bond yields continue to climb. The benchmark 10-year Treasury yield moved back above 5.2%, while the 30-year yield topped 5.3%.  Higher yields typically weigh on gold because the precious metal pays no interest, increasing the appeal of yield-bearing assets such as U.S. Treasuries.

Traders see a 70.3% probability of another Fed rate hike in October compared to 64.2% a day earlier, according to the CME FedWatch tool. The central bank raised rates by 25 basis points earlier this month and signaled that additional increases could be needed.

UBS analyst Giovanni Staunovo told Reuters on Monday that higher oil prices and growing expectations for additional U.S. rate hikes are the main drivers behind gold’s recent weakness. He said the environment could keep real yields and the dollar elevated, increasing the opportunity cost of owning gold.

Hansen Says Gold Faces Its ‘Toughest Test Yet’

Veteran commodities expert and Head of Commodity Strategy for Saxo Bank, in a post on X on Monday, said gold’s resilience is facing its “toughest test yet,” pointing to the surge in real yields, a stronger dollar and gold’s break below $4,230 per ounce.

Hansen said while ETF demand remains resilient, tighter financial conditions could create another source of pressure

“ETF demand remains resilient, but rising credit stress adds another risk: if tighter financial conditions trigger a scramble for cash, gold’s deep liquidity could make it a source of funds, adding short-term selling pressure even as longer-term fiscal and financial risks remain supportive,” Hansen said.

Meanwhile, economist Peter Schiff took a more bullish longer-term view, arguing that while rising bond yields are dragging gold and silver lower now, their potential impact on economic growth, federal deficits and inflation could ultimately support precious metals.

“Buy now,” Schiff posted on X.

NEM, B, PAAS Slide Premarket

Retail sentiment surrounding the SPDR Gold Shares (GLD) on Stocktwits was in the ‘bearish’ territory, while sentiment for the iShares Silver Trust (SLV) was in the ‘neutral’ zone.

The weakness spilled into U.S.-listed precious-metals stocks in premarket trading. Shares of gold miners Newmont Corp. (NEM) and Barrick Gold (B) fell 4.6% and 2.4%, respectively

Silver miner Pan American Silver Corp. (PAAS) was down 4.7%,  Hecla Mining (HL) slumped more than 5.4%, while First Majestic (AG) stock tanked 6%.

Spot gold prices are down 4.2% so far this year, while spot silver has declined nearly 15%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.