Gold prices slipped on Monday, the dollar scaled a two-decade high and yields on ten-year benchmark debt hit 3.18 percent for the first time since Nov 2018 as investors priced in the prospect of aggressive policy tightening by global central banks.
Spot gold fell 1 percent to $1,864.88 per ounce, while U.S. gold futures were down 1 percent at $1,863.90.
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.
Fed Chair Jerome Powell said last week that a 75-bps rate hike is not under active consideration.
However, market participants seem convinced that the U.S. central bank would need to take a more drastic action to curb soaring inflation, with a further 200 bps of hikes priced in for the rest of 2022.