Gold Faces Biggest Weekly Loss

Gold is experiencing its largest weekly loss since 1983, primarily driven by the escalating conflict in the Middle East involving the United States and Iran. Reports of the US preparing to deploy ground forces into Iran and the United States — The Pentagon sending warships to the region have heightened geopolitical tensions. This has led to a surge in energy prices and a reduction in expectations for interest rate cuts, as traders increase bets on a rate hike by October due to inflation concerns. The U.S. Dollar Index has strengthened, and investors have sold Gold to cover losses elsewhere, with bullion-backed ETFs seeing significant outflows. Despite its traditional role as a safe haven, Gold has dropped every week since the US and Israel attacked Iran last month. Analysts like Rhona O'Connell of StoneX Group — StoneX Financial Europe GmbH attribute the pullback to profit-taking, liquidation, and technical selling. Robert Gottlieb of JPMorgan Chase advises against buying the dip due to excessive volatility. While Gold remains up for the year, its current performance echoes the decline seen during Russia's invasion of Ukraine in 2022. The United States — Federal Reserve's decision to keep rates unchanged and Jerome Powell's emphasis on inflation reduction further influence market sentiment.