Has Gold Found a Bottom?

No. Gold has fallen roughly 25% from its recent peak to around $4,000 per troy ounce, but we still see further downside. Several of the forces that drove gold higher have weakened or reversed in recent months. A more challenging real-rate backdrop, less supportive demand trends, and fading investor momentum still argue for caution.

It’s easy to see why investors would expect gold to provide a safe haven under current conditions. But recent geopolitical developments pushed oil prices and inflation expectations higher, leading markets to price a higher-for-longer path for interest rates. Because gold has no cash flows, it tends to struggle in higher real-rate environments. Early signals from new Federal Reserve Chair Kevin Warsh have also reinforced confidence in Fed independence while signaling a somewhat hawkish bias, removing another support that had helped gold.

Read the rest of the publication here.