Core Reasons for the Downward Trend in Gold Prices

1.Fed More Hawkish Than Expected
At the March 19 meeting, the Fed kept interest rates unchanged at 3.50%–3.75%.
The dot plot indicated only one rate cut in 2026, delayed until after June, completely shattering earlier expectations of three cuts for the year.
Powell stressed that inflation remains unsteady and did not rule out further rate hikes, reinforcing expectations of higher-for-longer interest rates.

2.Surge in U.S. Dollar and Treasury Yields
The U.S. Dollar Index broke above 105, hitting a new year-to-date high.
The 10-year U.S. Treasury yield rose above 4.25%, sharply increasing the opportunity cost of holding non-interest-bearing gold. Capital flowed massively into interest-bearing assets such as U.S. Treasuries.

3.Backlash from Oil Prices and Stagflation Fears
Middle East conflicts pushed Brent crude to $105 per barrel, worsening inflation concerns.
Market logic shifted to:
Oil prices → Inflation → Rate hike expectations → Rising real yields → Falling gold prices
Traditional safe-haven logic temporarily became ineffective.

4.Capital and Technical Selling Pressure
Gold ETFs saw continuous outflows, speculative net longs dropped sharply, and forced liquidation by algorithmic and leveraged funds triggered a “sell-off cascade”.
Gold consecutively broke through six key levels: 5000, 4900, 4800, 4700, 4600, and 4500.

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