Gold has erased all its 2026 gains
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Gold just took a round trip: Prices dropped below $4,000 a troy ounce Wednesday back to where they were in early November last year.
Why it matters: Investors are losing their taste for the precious metal.
The big picture: There are a few competing and connected theories for what's happening, but the main thing to know is that gold's role in investors' portfolios changed over the past year or so.
- The shiny stuff was once viewed as a safe haven — you bought gold when you felt afraid. Lately, things have gotten more complicated.
By the numbers: Gold futures were trading at $3,990 on Wednesday. They have now given back all the year's price gains, coming down from a peak of around $5,300 in January.
Zoom in: As Brookings Institution senior fellow Robin Brooks and others have been writing, retail investors have been treating gold as a thing you buy in a risk-on environment.
- "Exuberance, not fear, drove gold and silver up to extraordinary heights at the start of this year," the Financial Times' Katie Martin wrote earlier this month.
Where it stands: The vibes are risk-off right now. The tech selloff extended into Wednesday, with the Nasdaq closing down for the third straight day this week.
- Bitcoin prices are also falling.
The intrigue: There's also a notion that gold's decline has to do with the end of the so-called "debasement trade," where investors looked to put their money in assets less tied to the dollar, over worries about the U.S. government's bloated deficit and threats to the Federal Reserve's independence.
- Fed chairman Kevin Warsh may have put the kibosh on that one.
- Since his press conference debut last week, investors appear reassured that the new Fed chief won't simply give in to Trump by lowering rates.
The bottom line: Nothing gold can stay.
