Did the Debasement Trade cause Gold to collapse?

Gold’s Surprising Downturn

Gold, once considered a reliable refuge during market turmoil, has recently failed to live up to its reputation. Over the last six weeks of conflict, gold prices have dropped by ten percent—a much steeper decline than the S&P 500, which has fallen by less than one percent. When an asset falls more sharply than the broader market during turbulent times, it can hardly be called a safe haven. In fact, gold is now acting more like a volatile asset that intensifies market downturns rather than cushioning against them.

Experts are debating the reasons behind this shift. One explanation points to emerging market central banks potentially offloading their gold reserves.