The gold market has lost its glint, dashing the hopes of people who predicted that lavish stimulus spending by central banks and governments would send bullion prices to new heights this year.
Gold futures on Wednesday closed their worst quarter since 2016, falling 9.5% to $1,713.80 a troy ounce. Few assets have fared worse: namely, the price of orange-juice futures, cocoa, Turkey’s lira and long-term U.S. government bonds.
The precious metal has suffered a reversal in fortunes since August, when prices closed at a record $2,069.40 a troy ounce. Gold has since dropped 17%.
Forecasts of a rapid global economic expansion this year, powered by vaccinations and U.S. stimulus, have tarnished gold’s allure as a haven in uncertain times.
“As people have got more optimistic about the world economy, interest rates have risen and the relative perception of gold to other yielding assets has become less attractive,” said Nabeel Abdoula, deputy chief investment officer at Fulcrum Asset Management.
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