Why has the price of gold fallen recently? How should we understand this?

Let me first talk about the recent market background: Gold touched a high of $4918/ounce on April 17th (within the historical high range), then quickly corrected, falling back to around $4722 by April 27th, a drop of nearly $200 in just 10 days.

Why did it fall? Mainly due to three overlapping factors:

1. Inflation exceeding expectations → Interest rate cut expectations delayed (the core reason)

Mid-April US inflation data exceeded expectations, leading the market to expect the Fed to cut rates only once this year, and the timing has been pushed back from June to the second half of the year. Gold is a non-yielding asset; the higher the real interest rate and the stronger the dollar, the less attractive gold becomes! This is actually the most direct macroeconomic force suppressing gold prices.

2. Reversal of the Middle East geopolitical logic

The US-Iran conflict broke out at the end of February. Normally, geopolitical risk should benefit gold as a safe haven. But this time it's different. The conflict pushed up oil prices (Brent broke through $110). High oil prices → high inflation → Fed hawkishness → stronger US Treasury yields. The safe-haven benefit was completely offset by macroeconomic tightening, making geopolitics an indirect negative instead.

3. Profit-taking at high levels

Gold prices rose from around $3300 at the end of 2025 all the way to over $5300+, a cumulative increase of over 60%. At high levels, the pressure from profit-taking is enormous. Once negative triggers appear, it's easy to cause a stampede of selling, accelerating the decline.

To summarize overall
This round of decline is dominated by the macro logic of "inflation exceeding expectations → rate cut delay → stronger dollar/Treasuries → gold under pressure." It's not a trend reversal. Long-term supports (central bank gold buying, de-dollarization) are still there, but geopolitics and Fed policy are the biggest variables in the short term.

And tonight, the Fed is going to speak again. What's your take?

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