Which were the “Three Bears” that made gold flop?
1. Inflationary Fears (Papa Bear)
Papa Bear, in my view, has been the resurgence of inflation anxiety. Following the severe inflationary pressures post-covid, we witnessed a period of relative cooling. However, the sharp upturn in Brent crude oil prices caused global concern, triggering a complete “about-turn” in interest rate expectations. The markets now believe the likely direction for rates is upwards and typically, when interest rates rise, gold prices tend to soften.
