First, demand for gold—the underlying asset—is more subdued than before.
Safe haven demand for gold has reduced with the easing of hostilities in the Strait of Hormuz.
Higher import duties have reduced gold imports by India, one of the largest gold consumers in the world.
Persistent inflation in the US has set up expectations for rate hikes by year-end; as a result, the dollar has strengthened against major currencies.
A stronger dollar makes gold less affordable for emerging economies (especially big gold buyers, India and China), thus pulling down gold demand.
First, demand for gold—the underlying asset—is more subdued than before. Safe haven demand for gold has reduced with the easing of hostilities in the Strait of Hormuz. Higher import duties have reduced gold imports by India, one of the largest gold consumers in the world. Persistent inflation in the US has set up expectations for rate hikes by year-end; as a result, the dollar has strengthened against major currencies. A stronger dollar makes gold less affordable for emerging economies (especially big gold buyers, India and China), thus pulling down gold demand.
