What is driving the fall in gold prices? | Explained

The story so far:

Gold, long seen as a safe haven in times of crisis, is behaving differently this time since the onset of the West Asian conflict on February 28. Since the start of the war, gold prices have fallen sharply. In India, 24-carat gold, which was trading close to ₹1.9 lakh per 10 grams in late January, has dropped to around ₹1.3 lakh per 10 grams. In most crises over the past two decades, gold has either held its value or risen. During the 2008 financial meltdown, gold surged as banking systems faltered. It rose sharply again during the COVID-19 pandemic as economies shut down and central banks flooded markets with liquidity. After Russia’s invasion of Ukraine in 2022, gold surged nearly 10% in the weeks following the start of the conflict. “Everybody should turn to gold as a safe haven when there is a political crisis, a military crisis, a financial crisis, or an oil crisis. That’s the first thing we do,” Bhagwan Das, former associate professor of Economics at Loyola College, Chennai, said. So why isn’t that happening now?