• Spot gold fell more than 1% to $4,551.10 per ounce, extending its recent losses.
  • The decline is attributed to a stronger dollar and rising Treasury yields, which dampen appeal for the non-yielding metal.
  • Analysts suggest that investors are rotating into riskier assets amid optimism over global growth.

Gold prices tumbled on Thursday, with spot gold losing over 1% to trade at $4,551.10 per ounce, as market sentiment improved and investors moved away from safe-haven assets. This marks the second consecutive session of declines for the precious metal, which has been under pressure from a firmer dollar and higher bond yields.

The greenback strengthened against major currencies, making gold more expensive for holders of other currencies. Meanwhile, benchmark 10-year Treasury yields edged higher, reducing the opportunity cost of holding non-yielding bullion. The combination of these factors has weighed heavily on gold, which had earlier this month touched record highs above $4,600.

“The market is in risk-on mode, with investors shifting allocations toward equities and other higher-yielding assets,” said a metals trader at a European bank. “Gold is feeling the heat as a result.”

Recent economic data has fueled optimism about the global economy, particularly in the United States, where labor market figures came in stronger than expected. Equity markets have rallied on the back of these signs of resilience, drawing capital away from traditional safe havens.

Central bank policies are also in focus. The Federal Reserve has signaled a more cautious approach to rate cuts, with officials emphasizing the need for sustained progress on inflation. This has led to expectations that monetary policy will remain tighter for longer, further supporting both the dollar and bond yields.

Without a more accommodative stance from the Fed, gold could face additional headwinds in the near term. According to people familiar with the matter, some hedge funds have reduced their bullish positions in gold futures, a sign that speculative interest is fading.

Despite the recent pullback, some analysts remain constructive on gold’s longer-term prospects. Geopolitical tensions and persistent central bank buying are seen as structural supports. However, the immediate momentum appears to be to the downside.

When approached for comment, representatives for major bullion dealers declined to provide specific insights, citing market volatility and client confidentiality.

Correction: An earlier version of this article incorrectly stated the magnitude of the price decline. The loss has been revised to over 1%, reflecting the latest market data.