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Gold is on course for its worst quarterly performance in more than ten years, with bullion's record-setting rally unwinding as retail demand retreats and Iran war-driven expectations for higher interest rates erode the case for holding the metal.
The confluence of fading individual investor enthusiasm and a shifting rate outlook has turned one of the market's most closely watched trades sharply lower.
The Rate Trade Cuts Both Ways The Iran conflict has done something counterintuitive for gold: rather than stoking conventional safe-haven buying, it has reinforced expectations that interest rates will move higher.
That matters because gold yields nothing. When rate expectations rise, the opportunity cost of holding bullion increases relative to yield-bearing alternatives, and capital tends to move accordingly.
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