Gold briefly fell below the $4,000 per troy ounce threshold before attracting bargain hunters, but the yellow metal remains on track for its steepest quarterly decline in thirteen years, according to Carsten Fritsch at Commerzbank. The precious metal is simultaneously facing a significant monthly loss as markets continue repricing expectations around Federal Reserve policy trajectories.
The sharp correction comes as traders reassess their monetary policy outlook, with the Fed’s messaging triggering a widespread repricing across safe-haven assets. Gold’s traditional role as an inflation hedge and store of value has been challenged by shifting central bank narratives and adjusting rate expectations. Despite the recent bounce from below $4,000, the quarterly performance marks one of the most severe retreats since the 2011 period.
The combination of hawkish Fed sentiment and reduced demand for portfolio insurance has weighed heavily on precious metals positioning across institutional and retail segments.
FXnCO Insight
Traders should monitor the $4,000 level as a critical support zone for gold, with Fed commentary remaining the primary catalyst for directional moves in precious metals through quarter-end.
Source: FXStreet