Why has gold's safe-haven appeal diminished? In the past week, international gold prices experienced a steep decline. As of March 21 Beijing time, the spot price of London gold not only fell below the key level of $4,500 per ounce but also recorded a weekly drop of 10.49%, the largest single-week decline since March 1983. While conflicts in the Middle East continue to escalate, why has gold's role as a safe haven failed to support its price? Wang Jun, chief expert at Green Dahu Futures, stated that short-term macroeconomic factors—specifically "rising global inflation, elevated interest rates, and a strengthening U.S. dollar"—have overshadowed gold's traditional safe-haven appeal. Combined with coordinated effects from fund behavior and technical adjustment needs, these factors have led to gold's decline instead of an increase. Traders also noted that during the rapid price decline, trading volume significantly expanded, indicating intense battles between bullish and bearish forces. Some funds that had entered the market earlier based on safe-haven logic showed signs of stopping losses and exiting. Gold prices fell more than 10% in a single week, triggering a global sell-off. According to Wind data, the spot price of London gold turned downward after reaching a high near $5,040 per ounce on March 14, closing lower for eight consecutive trading sessions. The main COMEX gold futures contract settled at $4,592.1 per ounce, marking a weekly decline of 9.62%. Silver prices fell even more sharply, dropping over 15% during the same period, while palladium and platinum followed international gold prices downward. Beyond precious metals, global assets faced selling pressure. The three major U.S. stock indices fell for four consecutive weeks, with the S&P 500 recording its longest weekly losing streak since March 2025. European bond markets also declined across the board: the yield on the UK 10-year government bond rose 17.7 basis points during the week, touching 5% for the first time since 2008, while the yield on Germany’s 10-year bond hit its highest level since 2011, with the two-year German bond yield surging 23 basis points during the week. On the news front, reports indicated that the U.S. is developing strategic plans to seize Iran's "nuclear reserves." Additionally, Iranian military forces threatened devastating strikes against "evil" U.S. and Israeli officials, commanders, and soldiers, warning that they would "no longer be safe," even while on vacation abroad. Jerry Chen, a senior analyst at Gain Capital, suggested that since the outbreak of geopolitical conflicts in the Middle East, financial market logic has become clearer: safe-haven funds are flowing into crude oil and the U.S. dollar. Inflation risks are forcing global central banks to end loose monetary policies and even shift toward interest rate hike cycles, thereby putting pressure on gold and triggering sell-offs in global stock markets. Furthermore, macroeconomic data released during the week further diluted market expectations for interest rate cuts. The U.S. February PPI (Producer Price Index) rose 3.4% year-on-year (against expectations of 3.0%), marking the largest increase since July 2025. Core PCE (Personal Consumption Expenditures Price Index) expectations were also revised upward to 2.7%. At the same time, the Federal Reserve signaled a hawkish stance by keeping the target range for the federal funds rate unchanged at 3.50%–3.75%, marking the second consecutive pause in rate cuts this year. The Fed also raised its expectations for PCE inflation, core PCE inflation, and GDP growth for this year and next. Additionally, rising interest rates and a stronger U.S. dollar directly weighed on gold prices. The yield on the 10-year U.S. Treasury note climbed above 4.25%, while the U.S. dollar index held firmly above the 100 level. A stronger dollar further depressed gold prices, which are denominated in U.S. dollars. "Bargain-hunting investors" were caught off guard as market sentiment turned icy. The rapid decline in gold prices left many retail investors with floating losses due to mistimed entries. Xiao Wen, an investor from Shanghai, is one example. On the morning of March 19, seeing that overnight international gold prices had fallen to around $4,800 and that accumulated gold quotes had followed suit, Xiao Wen decided to buy. Around 9 a.m., she purchased 12 grams of a bank’s accumulated gold product at a transaction price of 1,082.6 yuan per gram. Including a 6-yuan handling fee, her holding cost was approximately 1,089 yuan per gram. "Recently, accumulated gold quotes had stayed above 1,100 yuan; I thought that after such a big drop, a rebound was likely," she said. Around 2 p.m. that afternoon, international gold prices suddenly plummeted. The accumulated gold quote screen showed numbers rapidly falling. "I stared at my phone all afternoon, feeling desperate as I watched the price drop," she recalled. By 5 p.m., when she finished work, the quote had fallen to around 1,050 yuan per gram, leaving her with a floating loss of about 500 yuan—and the decline continued. In the early hours of March 21, Xiao Wen continued monitoring the market during U.S. trading hours. She placed an order at 1,010 yuan, but the price never reached that level. Worried about missing a chance to average down but struggling to stay awake, she hesitated before buying again at 1,026 yuan. The next morning, she found that gold had fallen as low as 1,007 yuan. Another investor, Xiao Lin from Hangzhou, was also trapped during the decline. When gold prices started falling sharply on March 18, Xiao Lin added to his position in a gold ETF. Over the next two trading days, as the ETF’s net asset value continued to drop with gold prices, he made two more purchases to average down his cost. "Every time it fell, I thought it was the bottom, but each time I bought halfway down the slope," Xiao Lin said. His three positions now show floating losses exceeding 10%, and with little capital left in his account, he has chosen to "lie flat" and wait. According to Wind statistics, as of March 21, the total assets of seven gold ETFs tracking the SGE Gold 9999 Index had shrunk by more than 240 billion yuan for the week. Investors like Xiao Wen and Xiao Lin, who "buy the dip" as prices fall, are not uncommon. Industry insiders caution that this "bargain-hunting" mentality can lead investors to overlook the persistence of a trend, and盲目 entering the market during sharp declines often carries significant risks. Will prices recover? The pressing question for the market now is whether gold prices can rebound. China Asset Management analysis suggests that gold, traditionally seen as a safe-haven asset, has continued to decline since March because its safe-haven function is realized during collapses in U.S. dollar credibility and out-of-control inflation, not during liquidity crunches and deflation risks. Currently, the market is concerned about marginal deterioration in liquidity, while the impact from geopolitical conflicts has noticeably weakened. The institution believes that the tight monetary policy impact on gold is likely temporary. Long-term drivers such as geopolitical conflicts and central bank gold purchasing logic remain intact, supporting gold's upward momentum over the medium to long term. However, short-term risks still need to be released. Despite market panic, institutions maintain that short-term pain does not overshadow gold's long-term allocation value. UBS Wealth Management believes that geopolitical uncertainty, continued central bank buying, and safe-haven demand will continue to support gold prices. The recent adjustment in gold prices is consistent with performance during the early stages of past geopolitical crises. As risks persist and real interest rates decline, gold may hit new highs this year. Luo Zhiheng, chief economist at Yuekai Securities, pointed out that the current sharp decline in gold is not a signal of the end of the bull market but rather a deep correction within an upward trend. In the long term, the normalization of global geopolitical risks, strong gold purchasing demand from non-U.S. central banks, and the risk of the global economy shifting from "inflation" to "stagnation" will provide solid support for gold prices. However, for investors eager to "buy the dip," institutions generally advise caution. Technical analysis indicates that gold prices have clearly broken below the key support level of the 60-day moving average, suggesting that further downside may be possible. The aforementioned trader suggested that, given that negative factors such as Fed monetary policy and dollar trends are still unfolding, the short-term downward trend is not over. Retail investors should avoid盲目 catching falling knives. Instead, they could wait for gold prices to stabilize and form a base within the $4,400–$4,600 per ounce range before gradually building positions for medium- to long-term holding.