TLDRThe precious metal gained 0.6% to reach $4,139.91 per ounce on Tuesday, bouncing back modestly following Monday’s 4% plunge.Crude oil prices continue climbing amid the ongoing US-Iran dispute over Strait of Hormuz access, heightening inflation concerns.Treasury yields on 10-year bonds reached a 19-year peak, diminishing gold’s appeal as an investment vehicle.The yellow metal has declined roughly 7% in the last month following Fed rate increases and hawkish policy signals.Market participants are closely monitoring Wednesday’s inflation figures and Friday’s employment data for Federal Reserve policy direction.Gold prices posted gains on Tuesday following a challenging session to kick off the week. The precious metal experienced a 4% plunge on Monday, marking one of its sharpest single-day losses in several months.Spot gold advanced 0.6% to settle at $4,139.91 per ounce as of 05:33 ET. Meanwhile, gold futures edged up 0.1% to $4,171.90 per ounce.Gold Dec 26 (GC=F)Even with Tuesday’s modest recovery, the metal continues trading near its lowest point in seven weeks. Gold faces headwinds from climbing bond yields and US dollar strength.US-Iran Tensions Sustain Elevated Energy Prices and Inflation WorriesOil prices maintained their upward trajectory as Iranian authorities remained firm on their terms for reopening the Strait of Hormuz. This critical shipping channel handles a substantial portion of worldwide energy transport.President Trump turned down Iran’s most recent proposal, which included a commitment to reopen the strait within one week. Sources indicate Iranian leadership believes reaching an agreement before November’s US midterm elections appears increasingly unlikely.The standoff between Washington and Tehran has now stretched into its eighth month, persistently disrupting global energy distribution and amplifying inflation anxieties.Elevated crude oil costs typically drive broader price increases throughout the economy. This dynamic encourages central banks to implement tighter monetary policy through rate hikes, creating a challenging environment for gold given the metal produces no yield.Bond Yields Surge to Nearly Two-Decade HighsThe continued rally in crude oil prices intensified selling pressure across US Treasury markets on Monday. Yields on 10-year government bonds climbed to levels not witnessed in 19 years.Elevated bond yields diminish gold’s relative attractiveness to investors. This occurs because fixed-income securities offer tangible returns, unlike the non-yielding precious metal.BREAKING: Spot gold and silver prices extend losses to nearly -4% and -5% on the day as the US 10Y Note Yield rises to a fresh 19-year high.Gold and silver have erased a combined -$1.2 trillion in market cap today. pic.twitter.com/nSTrKkOYZQ— The Kobeissi Letter (@KobeissiLetter) September 28, 2026Throughout the last 30 days, the yellow metal has surrendered approximately 7% of its value. This pullback emerged after the Federal Reserve implemented its first rate hike since 2023.Central bank policymakers maintained a hawkish stance, signaling additional rate adjustments remain possible this year. Current market pricing suggests approximately 70% probability of another increase coming in October.Researchers at ANZ noted the near-term trajectory for gold appears challenging. They identified elevated yields and persistent inflation risks as primary obstacles confronting the precious metal.A previous analysis from the prior week documented gold futures declining across three consecutive trading sessions. That selloff coincided with US dollar appreciation and the 10-year Treasury yield climbing to its highest reading since July 2007.Silver experienced similar downward pressure during this period, closing 2.4% lower at $64.382 per troy ounce.Market attention now shifts to two significant economic releases this week. Wednesday’s personal consumption expenditures index will provide the Federal Reserve’s preferred inflation measurement.Friday’s nonfarm payrolls data will deliver fresh insights into labor market conditions. These reports are expected to influence market expectations surrounding the Fed’s upcoming monetary policy decisions.Currently, gold finds itself navigating competing market dynamics. Geopolitical instability and rising energy costs bolster safe-haven demand, while strengthening bond yields and dollar momentum continue applying downward pressure on precious metals valuations.The post Gold Rebounds Modestly as Markets Brace for Critical US Inflation Numbers appeared first on Blockonomi.