Gold is closing Q2 2026 down roughly 28% from its January all-time high near $5,600, its worst quarterly performance in thirteen years. The
- Gold experienced its worst quarterly performance in thirteen years, shedding 28% from its January all-time high due to geopolitical crises that unexpectedly led to higher inflation and a hawkish Federal Reserve.
- Rising interest rates and Treasury yields have increased the opportunity cost of holding non-yielding gold, leading to significant outflows from gold-backed ETFs and a 'repricing' of the asset's safe-haven status.
- While central banks continue to buy gold, indicating a potential floor around $4,000, the article questions gold's traditional role as an inflation hedge, suggesting it's more of an interest-rate hedge, and highlights the uncertainty surrounding future Fed policy and oil prices.
Topics: Asset types, Market cycles macro sensitivity, Risk default, Alternative assets, Interest rate sensitivity, Market volatility liquidity, Credit counterparty risk
Tags: #gold #geopoliticalcrisis #federalreserve #interestrates #inflation #treasuryyields #etfoutflows #centralbanks #safehaven #macrohedge
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