Here’s a theory about why gold suffered its biggest one-day fall in more than 10 years, and it’s linked to the U.S. economy

Core Viewpoint - The recent decline in gold prices, attributed to the IMF and World Bank meetings, signals a potential shift in market sentiment regarding U.S. economic growth and monetary policy [2][3][5]. Group 1: Gold Price Dynamics - Gold experienced a significant 5.7% drop, marking its largest percentage decline since June 2013, following a rapid increase from $3,000 to $4,000 per ounce within two months [2][4]. - The recent rally in gold prices, which saw a 60% increase over the year, was deemed unsustainable, leading to an expected correction [1][2]. Group 2: Economic Influences - The annual meetings of the IMF and World Bank likely influenced delegates to revise their outlook on U.S. economic growth, which in turn affected the investment case for gold [3][5]. - Factors such as geopolitical uncertainty and fears of currency debasement were considered outdated and not currently driving gold prices, with the state of the U.S. economy being the primary influence [4][5]. Group 3: Market Reactions - Market commentators noted that the strengthening U.S. dollar and high gold prices in both nominal and inflation-adjusted terms contributed to the recent pullback [6][7]. - The decline in gold prices was also interpreted as a result of market mechanics, where profit-taking occurred after a period of euphoria and overextended positions were unwound [6].