What is the reason for the latest drop in the price of gold?

2022 has become one of the most challenging periods in the global economy and finance, with stock market crashes, record inflation, and economic recession.

All this will usually lead to investors starting to transfer their capital into the most stable assets, such as gold.

This is what happened in practice: in 2022, demand for the precious metal grew by 18% and reached its maximum over a 10-year period.

Demand isn't expected to decline in 2023, with most national banks planning to increase their gold reserves, and households buying up gold bars by the kilogram. All this is happening against the backdrop of declining supplies from Russia.

Leading analysts predict a jump in the price of this asset in the near future to $3,000 and even $5,000 per ounce.

It would seem that in such a situation, the price of precious metal should have long ago broken all records and gone far above $2,000 per ounce:

But despite this, a downward trend has formed and gold has already fallen in price to $1,845 per ounce.

Reasons for the fall in gold prices

If someone buys something, their main goal is to buy the asset as cheaply as possible and at the best possible price.

Therefore, one of the reasons for the currently unjustifiably low price of gold is manipulation of the exchange rate, the so-called bear market:

Market makers enter into large gold short trades with deferred delivery, whereby the trader does not have physical gold in hand. These trades are closed after the price drops by buying gold. This creates panic on the exchange, helping to sustain the downward trend.

The second reason for the decline is the increase in interest rates , which can be said to make money “more expensive”, creating a shortage of it.

It's clear that this situation can't last long. National banks will gradually begin lowering interest rates, which will signal an uptrend. In this situation, bears will likely no longer be able to compete with bulls, and gold prices will begin to rise.

Therefore, we are waiting for news and watching the XAU/USD pair charts - https://time-forex.com/grafiki

How to buy or sell gold on the exchange - https://time-forex.com/interes/torg-zoloto-terminal