Gold futures advanced to the highest level in three months on Monday, with spot gold trading near $4,700 per ounce amid heightened concerns over U.S. inflation and volatility in bond markets.
The surge in gold prices followed a sharp increase in U.S. Treasury bond yields last week, prompting the Treasury Department to double its purchases of longer-dated bonds in an effort to stabilize the market. Traders are now awaiting key U.S. inflation data and a speech by Federal Reserve Chair Kevin Warsh on Friday for further signals on interest rate policy and bond market direction.
Cryptocurrencies also posted gains, with Bitcoin rising above $80,000 for the first time since May, reaching $80,453. The digital asset has gained more than 25% over the past week, though it remains well below its all-time high of $126,000 set last year. Ether similarly climbed to $2,503.
In geopolitical developments, shipping activity through the Strait of Hormuz fell to its lowest daily level since early May, with only two commodity vessels transiting the waterway on Monday. The tally was significantly below the 10-day average of 14 vessels, according to shipping data. Iran has blacklisted 45 tankers for alleged violations of passage rules and threatened fines against vessels engaging in ship-to-ship transfers with the blacklisted ships.
Despite these tensions, Brent crude, the global oil benchmark, declined to $91.41 per barrel, down 0.8% or 76 cents. Asian equity markets showed mixed performance, with Japan’s Nikkei up 0.5%, South Korea’s Kospi rising 0.7%, and Hong Kong’s Hang Seng dipping 0.15%.
U.S. Treasury Secretary Scott Bessent introduced "Operation Economic Outcast," a campaign targeting economic misconduct, comparing its scale to the D-Day landings. While emphasizing a phased approach to sanctions, Bessent warned that measures would escalate quickly. The administration’s stance toward China and Iran remains uncertain, with Tehran vowing retaliation against any country participating in the U.S.-led campaign.
In economic data, Germany’s gross domestic product grew 0.3% in the second quarter compared with the previous three months, exceeding a preliminary estimate of 0.2%. The expansion was driven by a 2% rise in exports of goods and services, while wholesale and retail trade outperformed expectations. Investment, however, declined by 0.2%.
