The inflationary pressure brought about by the rise in oil prices continues to rise, supporting the hawkish monetary policy inclination of the Federal Reserve, boosting the US dollar, pushing up US bond yields, and causing another sell-off in the gold market.

OPEC+member countries Saudi Arabia and Russia announced that they will maintain oil production cuts for another three months until the end of this year, followed by a surge in oil prices on Monday. Saudi Arabia will continue to reduce production by 1 million barrels per day, while Russia will continue to reduce production by 300000 barrels per day.

Saudi Arabia stated that voluntary production cuts are aimed at supporting the stability and balance of the oil market, and the sustained production cuts have pushed oil prices to a 10 month high.

Naeem Aslam, Chief Investment Officer of Zaya Capital Markets, said, "Oil prices have risen because traders have received a loud and clear message that OPEC+has no intention of easing supply in the short term. The fact that Saudi Arabia has extended its voluntary production reduction indicates that OPEC+member countries are very willing to maintain high oil prices for an extended period of time and are not interested in the concerns of the central bank

Traditionally, a rise in oil prices has been beneficial for gold because of its inflationary nature. However, many analysts point out that the oil market is bringing further adverse factors to this precious metal in the short term.

Ole Hansen, head of commodity strategy at Shengbao Bank, said that rising oil prices are exacerbating concerns about inflation, which may force the Federal Reserve to maintain its hawkish stance and maintain interest rates at higher levels for a longer period of time.

Hansen pointed out that the US dollar index has returned above 104 points, reaching a 6-month high. Meanwhile, US bond yields remained near last week's 15-year high. Hansen pointed out that this year's oil prices are currently positive, and if oil prices continue to rise, it will have a negative base effect on overall annual inflation.

But Hansen added that due to the increased risk of global economic recession caused by rising interest rates, this will greatly suppress oil demand, and OPEC is also acting cautiously.

Hansen said, "In the short term, as the market continues to digest OPEC's latest measures, it will struggle. However, from a long-term perspective, we still believe that economic growth is weak and inflation continues to rise, which will continue to support potential demand for gold

The return of the US dollar index above 104 not only hurt gold prices, but also analysts pointed out that gold prices did not have enough upward movement last week to break the key resistance level above $1980 per ounce, causing some investors to feel frustrated.

Despite the mixed results of last Friday's US employment report and fluctuations in gold prices, gold seems to be looking for new fundamental catalysts to trigger its next major trend. At the same time, gold is showing signs of depletion on the daily chart, falling below the 50 day moving average and opening the way back towards $1920