By Bas Kooijman, CEO and Asset Manager of DHF Capital S.A
Gold has recently experienced a sharp pullback following its strong rally earlier this year. The move is primarily driven by a stronger US dollar and shifting expectations around interest rates, as central banks signal that rates may remain higher for longer.
“Gold didn’t fall despite risk, it fell because the macro consequences of that risk strengthened the dollar and delayed rate cuts.”
While geopolitical tensions remain elevated, the resulting increase in energy prices has raised inflation concerns, reducing the likelihood of near-term rate cuts. This has temporarily weighed on gold, as higher yields make non-interest-bearing assets less attractive.
It is important to note that this movement reflects short-term market dynamics and profit-taking after record highs, rather than a change in gold’s long-term fundamentals. We continue to monitor developments closely and see ongoing volatility as part of a normal market cycle.
