Gold and silver fall sharply to lowest prices since last year

The precious metals market has a new blow to deal with. Both gold and silver are cornered today with painful losses. In seven hours, $900 billion in market value has evaporated, while the assets are known to retain their value.

Gold lost 3.43 percent of its value today. As a result, the price of the most valuable asset in the world has fallen below $4,000 per troy ounce (the standard unit of weight of precious metals, which is about 31.1 grams).  It is the lowest level since November last year.

Gold is in its worst form since the end of 2016 with the seventh red week in a row now. And that has now resulted in the lowest level since November last year.

In these seven weeks, the price of gold has dropped by more than 16 percent. And since the record set at the end of January, the price has already fallen by about 29 percent.

Silver has an even harder time. The little brother of gold has fallen by 4.95 percent today, by 35 percent over the past seven weeks and by 52 percent since the summit in January. 

Silver has taken an even harder hit than Bitcoin (BTC), which took 100 days longer to halve in value.

Gold is called a safe haven because it holds its value when the economy falters, inflation rises or a crisis erupts. It is scarce and cannot be printed like euros or dollars, and it is independent of banks, companies and governments.

Silver also often moves in uncertain times, although it is somewhat more volatile. A large part of the demand comes from industry.

Nevertheless, the prices of gold and silver have plummeted by dozens of percent since the outbreak of the Iran war. They may have already fired their gunpowder after a historic run, in which the conflict was largely priced in.

Even now that oil prices are collapsing due to the provisional peace agreement, the decline continues. This is mainly due to the prospects for higher interest rates in the United States. Since last week's interest rate meeting, the market is even counting on an interest rate hike this year.

Half of policymakers think interest rates should be raised, and new Chairman Kevin Warsh made it clear that he does not question the 2% target.

As a result, interest rates on US government bonds have also risen. And since gold and silver offer no interest, investors are more likely to opt for safe government bonds.