Gold Plummets as Treasury Yields Hit 2007 Highs

The selloff pushed spot gold to $4,110.55 per ounce on Monday, marking its lowest point in over seven weeks. This volatility stems from a sharp rise in U.S. Treasury yields, with the 10-year note reaching 5.23% and the 30-year bond touching 5.54%. Because gold generates no interest, it struggles to compete for capital when government debt offers increasingly attractive, risk-free returns. A strengthening dollar exacerbated the decline, making the metal more expensive for international buyers.

Bitcoin has mirrored this sensitivity, retreating toward $83,000 as investors brace for potential Federal Reserve rate hikes. While the cryptocurrency faces the same macro headwinds as gold, it maintains a unique buffer in the form of institutional demand. U.S. spot Bitcoin ETFs recorded $2.39 billion in inflows last week alone, even as broader equity indices like the S&P 500 and Nasdaq drifted lower. Whether this ETF demand can continue to offset the impact of rising yields will likely hinge on upcoming U.S. labor market data and inflation reports, which remain the primary drivers of Fed policy expectations.