As expectations about the future monetary policy of central banks changed (with inflation rising to the surface, no one now expects the Fed and ECB to cut interest rates), the dollar reversed course and began to strengthen.
At the same time, bond yields rose and precious metals lost ground last month significantly. The price of an ounce of 31.1 grams fell by 12 percent.
This is the biggest drop in gold in one month since October 2008, when the price fell by 17 percent. Even then, it was clear that events that should theoretically boost gold prices can occasionally have a negative impact on gold, provided the entire financial system is crying out for much-needed liquidity, SEEbiz reports. In such circumstances, even precious metals cannot escape selling pressure. Of course, when considering this decline, one must take into account the broader context and the high growth in gold prices in the previous months.
