Gold Price Plunges as Dollar Debasement Trade Uncertainty Grows

The price of gold has been experiencing a significant downturn, losing nearly 1.5% on the session as US indices and Bitcoin struggle.

This decline may be a pause before further gains or an indication that the recent bullish advance has reached its peak.

The 'dollar debasement trade', which saw precious metals like gold rally due to concerns over the US debt situation, is being reevaluated in light of the US Treasury's decision to up long-dated bond buying and lower rates.

Kevin Warsh's speech at Jackson Hole on Friday may prove decisive for the dollar and by extension, the gold forecast. Unless yields start to head more decisively lower, the pressure will remain on the US dollar, with currencies of countries with better fiscal discipline likely to be supported.