In a stark rotation of capital, the precious metals sector retreated 5.2% as investors liquidated safe-haven assets in favor of high-yield AI and tech equities. Despite overall commodity price inflation, gold and silver are struggling to maintain their traditional inflation-hedge premiums.
This 5.2% contraction indicates that institutional liquidity is bypassing static stores of value. The market is effectively stating that the opportunity cost of holding non-yielding precious metals is too high in an environment where hyperscaler tech earnings are exploding.
Until we see a systemic break in the equities market or an unexpected sovereign debt crisis, precious metals will face stiff macroeconomic headwinds. Traders should expect gold to test lower support bands before finding a solid accumulation zone, as the US Dollar index and Treasury yields continue to dictate the terms of engagement for bullion.
Source: World Bank Markets Outlook
