Gold Price Plummets 28% from Record High Amid Dollar Strength and Rate Hike Fears

Gold prices have plummeted from their January all-time high of $5,626.80 an ounce to around $4,045, a drop of over $1,581 or nearly 28% in just six months.

This decline is attributed to several factors, including the stronger US dollar, expectations of higher interest rates as the Federal Reserve responds to inflation concerns, and investor liquidations as they pivot towards higher-yielding assets.

The rising oil prices have reignited inflation fears, prompting markets to price in a high probability of Fed rate hikes. This would increase the appeal of cash and bonds over non-yielding assets like gold.