On Friday the price of gold plunged to the lowest price since April of 2020, as an aggressive Federal Reserve frightened investors away from non-return bearing investments.

Spot gold prices dropped to $1,670 per ounce as of 7:00 AM EST. Non-yielding gold has dropped nearly $400 since it peaked in March, due to its high sensitivity to US interest rate hikes.

Carsten Menke, head of Next Generation Research at Julius Baer said in an interview, “The gold market has clearly priced in a more aggressive US Federal Reserve ahead of next week’s meeting, reflecting the Central Bank’s determination to fight inflation.”

Menke noted that there is an expectation of a 75 basis point hike at the next FOMC meeting, and some expect a 100 basis point hike, all of which is being reflected in the gold market. He added that at this point it would be a positive surprise for the gold market were the Federal Reserve to only hike rates 75 basis points.

Ole Hansen, head of commodity strategy at Saxo Bank told Bloomberg, “Damage is being driven by the market pricing in a 1% rate hike next week and a terminal rate around 4.5%. Stronger than expected retail sales are not helping.”

Gold has dropped 9% so far this year amid aggressive policy tightening by the Federal Reserve that has driven outflows from non-interest bearing assets as it strengthened the dollar relative to commodities.