$PAXG Gold plunge: why the "safe haven" has sharply lost ground and what’s next

In the past week, gold experienced one of its strongest declines in decades – over 8–10%, hitting new lows in several months.

The main reason is the sudden shift in expectations regarding monetary policy. Due to the spike in oil prices and inflation risks, the market no longer believes in a swift rate cut and even considers the possibility of an increase. This is critical for gold, which does not generate income.

The second factor is a strong dollar and rising bond yields. Capital is flowing into more profitable instruments, reducing demand for precious metals.

Paradoxically, geopolitics has also played against gold. The conflict in the Middle East pushed oil above $100, which intensified inflation and forced central banks to maintain a tight policy.

Additional pressure has been created by profit-taking after record growth and forced sales to cover losses.

Forecast: in the short term, further decline to $3800–4000 per ounce is possible if rates remain high. At the same time, any escalation or financial instability could quickly restore demand for gold as a safe-haven asset.