Gold is getting cheaper due to rising bond yields and the dollar.

In the first quarter, gold fell by about 10%, which was a record drop for this period since 1982, writes Bloomberg. The decline in the price of gold, which does not generate any interest income, was driven by higher bond yields and the dollar.

Physical metal volume in gold ETFs dipped to an all-time low since May 2020, and large speculators slashed their net long precious metal position to nearly a two-year low.

“The reason (for the fall in the price of gold) is a high appetite for risk. It seems that market participants do not have a strong need for defensive assets, ”said Daniel Briezman, an analyst at Commerzbank. "We think it will be difficult for gold to get back what it has lost as long as the market continues to prevail."

Now the main hope of the gold bulls is that massive fiscal and monetary stimulus, as well as the implementation of the pent-up demand accumulated during the pandemic, will launch the inflation flywheel, writes Bloomberg.

Inflationary expectations have been growing for almost a year, but the dynamics of consumer prices remains weak so far.