Gold and silver prices fall sharply as higher bond yields weigh on metals

Gold and silver prices slipped sharply on Monday, as rising global bond yields cooled investor appetite for non-interest-bearing assets, like precious metals. The sell-off also dragged major mining stocks lower in premarket trading.

Gold futures slumped 3.34% to $4,176.80, while spot gold prices were off by 3.27% at $4,145.88 around 5:40 a.m. E.T.

Silver, meanwhile, fell even further. Silver futures were last seen 5.1% lower at $61.52 per troy ounce, while spot silver had shed 4.92% to $61.11.

U.S.-listed shares of global gold and silver miners dropped in premarket trading on the back of the retreat.

Sibanye Stillwater, a major gold producer which is also active in platinum and palladium markets, was 7.92% lower ahead of Monday's market open, while Harmony Gold Mining slumped 7.49%.  Newmont Corporation was down 4.72% in premarket trading.

Among silver miners, Silvercorp Metals was down 7.13%, Endeavour Silver shed 5.86%, and Hecla Mining dipped 5.55%.

The downward moves come as investors continue to monitor inflationary pressures and the likelihood of further interest rate hikes from the Federal Reserve against a backdrop of surging government bond yields.

"If hikes bring inflation under control, gold faces sustained pressure," Max Baecker, president of American Hartford Gold, said in a note Friday. "If inflation sticks or economic stress builds, demand for gold as a diversifier holds."

Baecker added that rates are "just one piece of the gold story," noting how global central banks purchased a record 289 metric tons in the second quarter, which he sees as a longer-term reserve strategy separate from Fed rate decisions.