The current weekly drop in gold prices is the sharpest in six years, News24 reported.
The precious metal – widely seen as a protective asset – has fallen every week since the US and Israel attacked Iran last month. The decline came amid rising Treasury bond yields and a stronger dollar. Investors sold gold to cover losses in other assets, and gold-backed funds recorded outflows as global stocks wiped out all gains since the start of the year.
You should not buy on the fall – volatility is too high. Until volatility decreases and prices stabilize, further sell-offs are possible, market analysts believe.
Gold-backed funds (ETFs) are heading for a third week of outflows, with their holdings down more than 60 tons over the period, Bloomberg data show.
The dynamics of gold prices since the beginning of the attacks on Iran are reminiscent of the fall of this asset in 2022, when the military campaign between Russia and Ukraine caused an energy shock that affected global markets. At that time, gold showed a decline in prices for seven consecutive months, until October – it was the longest session of cheapening of the precious metal in the history of observations.
Despite the recent decline, gold is still 8% more expensive than at the beginning of this year. In late January, prices reached a record high of just under $5600 per ounce, helped by high investor interest, central bank purchases and concerns about threats to Fed independence from U.S. President Donald Trump.
