Gold Price Drops Over 3.6% in 2 Days
The price of gold has fallen by more than 3.6% over 2 days, as indicated by today's XAU/USD chart. The day before yesterday, at the opening of the daily candle, the price of gold was $2421 per ounce, and yesterday at the close it was $2331.
This can be explained by market participants expecting higher Federal Reserve interest rates for a longer period. However, although gold is a hedge against inflation, it has two drawbacks:
→ It does not inherently generate income;
→ The gold market may be overvalued – after all, a historical peak was reached on May 20th.
Therefore, investors are increasingly paying attention to bonds – they also allow hedging against inflation, while their yields are rising.
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