Yesterday, gold closed up 0.7%, or $13.50, to $1,881.50 on COMEX.

The highest level the precious metal hit on May 19th was $1,891.30. The last time gold reached the same level was on January 7th.

There were several factors that boosted the price of gold yesterday. The Bitcoin rush is recognized as the main driver of a rise in the value of gold. On Wednesday, the flagship cryptocurrency plunged to $30K, losing 30% of its value, as China banned crypto services.

Director of research at BullionVault Adrian Ash notes that gold can also be volatile. But there has never been a case of the precious metal losing half of its value within one week.

The expert believes that digital cash will never be able to substitute gold and become a full-fledged risk diversification tool no matter how important it is now or will be in the future.

A drop in the main US stocks also provided support for gold. Ahead of the release of the minutes from the Federal Open Market Committee's April meeting, Wall Street was in a state of panic. Investors rushed to sell risk assets fearing that the regulator would have to tighten monetary policy amid growing inflation.

According to Adrian Ash, gold has already increased in value during falls in such risk assets as shares. It is not surprising that demand for the safe haven now grew amid a plunge in the stock market.

In addition, gold went up yesterday because of a weaker US dollar. Ahead of the release of the minutes, the US dollar index approached its 3-months low. The greenback started recovering immediately after the publication.

As soon as minutes of the April meeting were presented, the US dollar and Treasury yields started to gain ground. Their upward momentum was fueled by reports that some Fed officials seemed ready to consider reviewing monetary policy due to a rapid economic recovery.

In this light, gold plunged from the 4-months high. Its downward momentum continued during early trading hours on Thursday.

At the moment of writing, gold futures for delivery in June traded near $1,877. The difference in value from the previous day's closing price was $4.3, or 0.23%.

According to Ed Moya, a Senior Market Analyst at OANDA, investors expected the safe haven to reach the $1,900 mark. However, the FOMC Minutes hinted at an earlier-than-expected tightening of monetary policy, boosting bond yields and reversing the precious metal.

At the same time, the expert suggests that gold is now showing good performance. In the light of the recent bitcoin plunge, many institutional traders are likely to remain loyal to the more reliable asset. In the short term, gold is expected to trade in the $1,850-1,890 range.

There are even more promising forecasts for gold. Thus, Brien Lundin, an editor from Gold Newsletter, assumes that the price of gold may skyrocket amid growing inflation concerns and uncertainty over the Fed's future stance on monetary policy.

Gold has recently been bearish along with other markets because of investors' concerns about the possibility of monetary policy tightening. This week, however, the asset has started to perform its main function again, which is hedging against inflation. The market now perceives gold differently. The precious metal may well be at an early stage of a massive rally.

Yesterday's trading in other metals indicated that gold was sent into a tailspin. All these metals fell in price on Wednesday.

Thus, silver sagged by 1.1% to $28.30. Copper also lost 1.1% and settled at $4.58 per ounce. Platinum tumbled by 1.9%, closing at $1,201.60. Palladium dropped by 0.6% to $2,884.80.