Gold and Silver Lose 700 Billion USD as Iran Threatens Bab el-Mandeb

Gold and silver lost approximately 700 billion USD in market value in one day. Gold fell below 4000 USD, and silver dropped below 55.50 USD, marking its lowest level in about 7 months. A stronger dollar and increased expectations of Federal Reserve rate hikes are pressuring both metals. Iran's threat to close the Bab el-Mandeb Strait, a crucial shipping route, typically drives investors to gold, but this time they sold off, impacting US stocks as well. Gold declined 1.7%, erasing about 485 billion USD, while silver dropped 3%, resulting in a combined loss nearing 700 billion USD. Since reaching record highs in January, gold has lost around 28% of its value. Investors are shifting funds into dollars and short-term US Treasuries, which offer solid yields. The Federal Reserve, under new Chair Kevin Warsh, maintained rates at 3.50% to 3.75% in June, with minutes revealing a divided outlook on future rate hikes. SPDR Gold Shares (GLD) has seen outflows of 14.4 billion USD since March 1, surpassing the 9.6 billion USD pulled from all spot Bitcoin ETFs since October. Bitcoin traded near 64,650 USD, up about 4% this week, after hitting its most oversold level against gold on record. Analysts note Bitcoin's performance is influenced by macroeconomic factors, including rates and ETF flows.

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