Been watching gold drop consistently over the past few weeks and trying to figure out what’s driving this downward momentum.
Usually gold holds up better during uncertain times but this selloff seems different. What factors are you seeing that might explain this trend?
Dollar strength is one piece, but the Fed’s hawkish stance is the bigger driver. When traders expect higher rates to stick around longer, gold loses appeal fast.
China’s economic slowdown is reducing physical demand too. Their central bank buying has been supporting prices for months, but that’s cooling off.
Technically, gold broke below $1950 support and triggered stops. Once momentum shifts down, it feeds on itself until we hit the next major support around $1900.
Gold often declines when the dollar gains strength. Investors tend to move to safer assets like the dollar.
Risk appetite is back so people dump gold.
The strong dollar is a factor, but rising bond yields are also affecting gold. Higher yields make gold less appealing since it lacks interest payments. Profit taking after recent highs is common for gold after significant increases.