London: Gold prices declined on Monday as a stronger US dollar and rising US Treasury yields reduced expectations that the United States Federal Reserve will cut interest rates soon.

Spot gold slipped to around 5,080 dollars per ounce during trading, while US gold futures also moved lower and traded close to 5,100 dollars per ounce. The decline came as the dollar strengthened to a three month high, making gold more expensive for buyers using other currencies.

Analysts said the rise in US Treasury yields also pushed investors away from gold. When bond yields increase, interest bearing assets become more attractive than gold, which does not offer returns.

Markets are also reacting to the recent surge in global oil prices. Crude oil has climbed above 110 dollars per barrel following tensions and conflict involving Iran in the Middle East. Higher oil prices are raising concerns that global inflation could increase again.

Because of this, investors now believe the US Federal Reserve may keep interest rates higher for longer to control inflation. Market expectations for early rate cuts have weakened in recent days, putting further pressure on gold prices.

Investor expectations show that the probability of the Federal Reserve keeping interest rates unchanged in June has risen significantly compared with last week. Many analysts now believe the first rate cut could come later in the year rather than in the coming months.

Other precious metals also declined alongside gold. Silver, platinum and palladium all recorded losses during Monday’s trading session as the stronger dollar weighed on the broader metals market.

Despite the ongoing geopolitical tensions in the Middle East, which usually support demand for safe haven assets like gold, the stronger dollar and rising bond yields are currently having a greater influence on the market.

Experts say gold prices may continue to remain volatile in the coming weeks as investors closely watch developments in the global conflict, oil prices and signals from the US Federal Reserve about future interest rate decisions.