The market has not seen such a drop since the global financial crisis. This is the worst monthly result since October 2008, reports tochka.by with reference to Reuters.
Why gold is getting cheaper
The main factor, experts explain, is the change in expectations on rates in the United States. Earlier, the markets expected that the Federal Reserve System would announce a reduction in interest rates this year. But these expectations did not materialize.
The reason is a significant increase in energy prices against the backdrop of the conflict in the Middle East. This increases inflation risks and forces the regulator to act more cautiously.
The head of the US Federal Reserve Jerome Powell directly stated that the regulator can still “wait and see” how the situation will affect the economy.
Additional pressure on the cost of precious metal is also exerted by the strong dollar. Because of this, gold is becoming less attractive to investors.
What is happening now
In recent days, the market has shown signs of correction. Thus, on Tuesday, March 31, gold rose by 1.5% to about $4578 per ounce.
It was briefly supported by the hope for a possible de-escalation of the conflict around Iran. However, so far it does not change the main trend.
The situation in the Middle East continues to be extremely tense, which spurs the growth of energy costs and may provoke global inflation. Such a statement was made the other day by the IMF.
In the conditions of global price growth, the US Federal Reserve is unlikely to cut rates, which means that the dollar will continue to grow and gold will fall.
