Gold has fallen in price the most in three months. What is the reason for the sell-off?

The price of gold collapsed by almost 2.5% on August 11, the biggest decline in the last three months. Last week, the precious metal rose to a record high, but now that the White House has denied plans to impose duties on gold bullion, and investors are waiting for the settlement of the conflict in Ukraine, the value of gold as a "safe haven" is weakening.

Gold futures with delivery in December collapsed on Monday, August 11, on the NYMEX exchange by 2.44% - to $3406 per ounce. In absolute terms, this $85.3 drop is the largest since Ma. 12. On that day, the U.S. and China agreed on a temporary reduction in duties and gold contracts lost $116, MarketWatch recalls.

Overall, gold has risen in price by about 30% since the beginning of the year amid uncertainty in U.S. economic policy, which has encouraged central banks to buy the precious metal.

Gold fell in price after quotations jumped to a record $3500 per ounce last week: the market was caught by surprise by a report that U.S. Customs and Border Protection classified bullion weighing 1 kg and 100 ounces in the commodity category subject to duties, MarketWatch reported.

However, late Friday night, the White House denied the information. U.S. President Donald Trump "intends to issue an executive order soon to clarify misinformation regarding duties on gold bullion and other specialized goods," The Wall Street Journal quoted its White House source as saying. Futures went down afterward and continued to decline on Monday.

"Gold will not be taxed!" confirmed Trump on social media site Truth Social on Monday, already after the metal had fallen significantly in price.

"The market initially rallied on uncertainty surrounding the duties, but is now experiencing nervous liquidation [of long positions] as participants wait for further clarity from the White House," Kitco Metals senior analyst Jim Wyckoff explained to Reuters.

An additional pressure factor, according to analysts, were expectations of a possible truce in the war between Ukraine and Russia, they are linked to the meeting between Presidents Trump and Putin, which is scheduled to take place on Friday in Alaska.

U.S. consumer price data will be released on Tuesday, followed by producer price data on Thursday, Reuters reports. These statistics may reverse the trend.

"Inflation data will be particularly important after the weak employment report. If the figures come in higher than expected, it could give the Fed an excuse not to cut rates in September, which would have a negative impact on gold prices," added Wyckoff of Kitco Metals.

This article was AI-translated and verified by a human editor