Gold Tests Central Banks As Forced Selling Meets New Demand

Gold's violent reversal this month shows how a quick sentiment flip can erase value. Just last week, the yellow metal experienced one of the worst performances in decades, dropping 10.5%.Prices peaked just shy of $5,600 an ounce in late January, capping a powerful rally driven by geopolitical tension, central bank demand, and retail momentum. But after a volatile February, the Middle East war upended the rally. The rout continued this Monday, touching $4,100 an ounce before rebounding."Gold is right now trading like a risk asset, as it has during most broad risk-off moments over the past two decades," Citigroup said in a note, adding that the pro-cyclical behavior appeared "particularly extreme" given the surge in retail participation and momentum buying over the past six months.Flipping to Rate HikesInflation fears have returned amid the escalating Middle East conflict. These expectations have quenched the expectations of a rate cut. According to the FedWatch, rate cuts are not even on the table. Instead, the market sees ...Full story available on Benzinga.comWeiter zum vollständigen Artikel bei Benzinga Weiter zum vollständigen Artikel bei Benzinga