Gold’s worst month in years tests its role as a pension hedge
Gold just posted its worst month in more than a decade even as prices bounced on Tuesday, underscoring how the Iran war, inflation fears and higher‑for‑longer rates are hitting one of the most widely used hedging assets.
Reuters said that the spot gold rose 3.2 percent to $4,652.31 per ounce by 1:31 pm EDT, the highest level since March 20, while US gold futures settled 2.7 percent higher at $4,678.60.
CNBC reported that gold futures still fell more than 10 percent in March, marking their biggest monthly decline since June 2013 and snapping an eight‑month positive streak.
Reuters said spot gold was on track for its steepest monthly drop since October 2008 as “persistent inflation worries and expectations of higher interest rates due to the impact of the Iran war weighed on the non‑yielding metal.”
Higher oil prices triggered by the war in the Middle East have “intensified inflation concerns and prompted markets to reassess interest rate expectations.”
Despite gold’s role as a hedge against uncertainty and inflation, Reuters noted that high interest rates raise “the opportunity cost of holding the metal.”
The US dollar slipped on Tuesday but remained on course for a monthly gain, making “greenback‑priced bullion more expensive for holders of other currencies.”
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