Post #15902

Gold Is a Safe Haven, But It's Tanking? Gold is down nearly 3.7% and slipping toward the $5,100 area. The move lower shows that, for now, dollar strength is overpowering the usual safe-haven bid. Gold is getting squeezed despite geopolitical risk rising, the bigger move right now is in the U.S. dollar and yields. As energy prices surge on Middle East tensions, inflation expectations are moving higher, bond yields are rising, and markets are pushing back Fed cut expectations. That is supporting the dollar—and a stronger dollar is capping gold. The market has already shifted expectations for the next Fed cut from July to September, even though two cuts are still priced for the year. At the same time, expectations for further U.S. military action against Iran and growing threats around the Strait of Hormuz. Under normal conditions that would support gold, but right now the inflation-yield-dollar dynamic is taking control. This is what makes markets fun and interesting. - Alan