Spot gold fell below $4,000 intraday yesterday for the first time since July 29. It’s now at 3996.
It had already dropped 2.78% the day before, falling nearly $120 in a single day. It’s down more than 10% from its August high, and nearly 25% from its January high. Almost all of its gains over the summer have been wiped out.
The strange thing is: there’s a war in the Middle East, oil prices are rising, and gold should theoretically be going up.
Instead, it fell.
The reason isn’t complicated. This bout of inflation is driven by oil prices, not demand. When oil prices rise, the market worries that expectations of interest rate hikes will stretch into the first quarter of next year—and gold is especially vulnerable to rising real interest rates.
So the safe-haven narrative lost out to the interest-rate narrative.
The same reason also explains two other things: the Nasdaq fell 2.6%, and Bitcoin dropped back to 80,000.
One oil price has weighed on stocks, crypto, and gold all at once. $XAUT
#黄金自7月以来首次跌破4000美元
It had already dropped 2.78% the day before, falling nearly $120 in a single day. It’s down more than 10% from its August high, and nearly 25% from its January high. Almost all of its gains over the summer have been wiped out.
The strange thing is: there’s a war in the Middle East, oil prices are rising, and gold should theoretically be going up.
Instead, it fell.
The reason isn’t complicated. This bout of inflation is driven by oil prices, not demand. When oil prices rise, the market worries that expectations of interest rate hikes will stretch into the first quarter of next year—and gold is especially vulnerable to rising real interest rates.
So the safe-haven narrative lost out to the interest-rate narrative.
The same reason also explains two other things: the Nasdaq fell 2.6%, and Bitcoin dropped back to 80,000.
One oil price has weighed on stocks, crypto, and gold all at once. $XAUT
#黄金自7月以来首次跌破4000美元