Gold Slips as Tech Stocks Rally from AI Sell-Off

The PRICE of GOLD gave up early gains on Monday as Asian semiconductor shares and US AI tech stocks rebounded from last week's sell-off while demand for US Treasuries eased, with bond yields reversing an overnight decline, writes Atsuko Whitehouse at BullionVault.

Dipping beneath 5.06%, the annual yield offered by 10-year US Treasury bonds at first extended last week's steep retreat from quarter-century highs in Washington's cost of borrowing, but then reversed this morning's drop to trade back up at 5.10%.

Spot gold prices in London fell to $4150 per troy ounce, down 1.0% from Friday's finish, when it snapped the longest stretch of weekly gold price losses in more than 30 years.

Asian equity markets meanwhile steadied from last week's tech-stock crash and US AI futures pointed higher, but European bourses fell sharply, led by the CAC40 in Paris losing 1.4% after the weekend's "unbridled" violence and looting at cost-of-living and anti-austerity protests in Paris, Marseilles and 14 other French cities and towns.

The PHLX Semiconductor Index (NasdaqIndex: SOX), which tracks major US-listed chipmakers, lost 15.7% over 8 sessions of consecutive losses through Friday, while gold rose 0.8% over the same period.

On Thursday and Friday alone, semiconductor stocks lost 4.7% while the gold price in Dollars gained 2.4%.

But gold's response to previous semiconductor sell-offs has been varied, dropping 4.7% when semi stocks fell 28.6% over 26 trading sessions to the end of July, and gaining 5.9% when concerns over an AI investment bubble next returned.

Cracks are appearing in America's debt-fuelled AI infrastructure boom, says the Financial Times after last week's spike in the sector's borrowing costs and stock market slump.

According to a report on energy and the AI sector from the International Energy Agency, capital spending by the largest technology companies exceeded $400 billion in 2025 and was projected to rise by a further 75% in 2026, with capacity at data centres specifically designed for AI more than tripling in 18 months.

The market doesn't understand our business, says an internal memo from Mike Intrator, co-founder and CEO of major 'neocloud' provider CoreWeave (Nasdaq: CRWV) who has now sold $1 billion of CRWV stock since its share price peaked some 150% above today's level 3 months after floating in March 2025.

CRWV leapt more than 4.0% at Monday's stock-market opening in New York after halving in value over the past 6 months.

Brent crude meanwhile fell 2.3% in early European trading on Monday after US President Trump decided late Friday to waive new Russia-related sanctions and tariffs before they took effect, while leaving existing sanctions in place.

Ukrainian President Volodymyr Zelenskyy criticised Trump's decision, warning that it would embolden Moscow to continue its attacks on Ukraine.

With New York's Nasdaq 100 index of tech stocks making a 1.4% rise at Monday's opening, South Korea's Kospi Index, heavily weighted to giant chipmakers Samsung and SK Hynix, rebounded 1.8% after losing more than 11% last week.

The Dollar rallied from a new 4-year low versus China's Yuan, and it also rose back towards last week's 17-month high against the Euro after the weekend's French violence coincided with protests in Portugal, Spain, Belgium, Italy, Greece and Albania.

European government borrowing costs rebounded, led by France's 10-year OAT bond yield rising to 4.89% per annum.

Gold priced in Euros held steady around €3719 per ounce, while gold priced in Pounds fell 0.3% to £3127.

The price of silver, which derives nearly 60% of its annual demand from industrial uses including electricals and electronics, meanwhile fell 0.2% to $57.59 per ounce by London lunchtime.