Persistent low-level volatility in gold prices is causing investor sentiment to waver. "Gold keeps falling; thankfully, I liquidated some holdings earlier," one investor remarked, noting that while long-term prospects for gold are positive, the current low and choppy market conditions have made them hesitant to enter new positions. Conversely, other investors are considering buying the dip to hedge against losses from higher-priced holdings. On May 28, spot gold prices fell below $4,400 per ounce during trading, declining over 1.5%. At the time of writing, spot gold was trading at $4,386 per ounce, down 1.54%, while COMEX gold futures were at $4,420 per ounce, down 1.37%. With gold prices oscillating at lower levels, investors face the dilemma of whether to add to positions or cut losses. "Feels like gold can't recover," commented an investor on social media, stating plans to potentially exit and shift to other sectors depending on the next day's market, expressing significant disappointment. Another investor lamented, "Didn't expect my worst investment this year to be gold." The declining and volatile gold prices have spread a sense of discouragement among investors. Since May, spot gold has fallen for two consecutive weeks, with a cumulative monthly drop exceeding 3%. From its historic high near $5,600 per ounce earlier this year, the price has retreated by more than 20%. "After breaching the $4,400 level, the immediate key support for spot gold is seen in the $4,370–$4,400 range. A further break below could see strong support emerge around $4,200," stated Zhou Yiqin, a senior financial regulatory policy expert. Zhou Yiqin believes the current fundamental backdrop remains bearish, with a strong US dollar and elevated US Treasury yields suppressing a rapid gold rebound. However, sustained central bank gold purchases globally provide underlying support, making a sustained deep decline in the short term less likely. Overall, gold is expected to potentially enter a phase of sideways consolidation within the $4,000–$4,200 range, with a tug-of-war between bulls and bears to digest selling pressure and rebuild momentum for a recovery. Tian Lihui, Dean of the School of Finance at Nankai University, added that after losing the $4,400 level, short-term critical support lies in the $4,375-$4,380 range. A break below this zone could trigger technical selling pressure, pushing prices to test $4,240 or even $4,100. "A rebound would depend on two conditions: a significant drop in June's core PCE data to alter rate hike expectations, or a sudden escalation in Middle East tensions. Until the Federal Reserve sends clear dovish signals, a volatile downtrend remains the primary trend. However, if US inflation shows a turning point, gold prices could quickly recover above $4,500," Tian Lihui stated. Tian Lihui further noted that whether stability can be regained depends heavily on the progress of US-Iran negotiations and marginal changes in interest rate expectations driven by PCE inflation data. The market has already priced in pessimistic expectations, and a drop below $4,300 might attract gradual entry from long-term allocation funds, leading to a recovery pattern characterized by "sharp declines followed by gradual increases." As gold prices fluctuate at lower levels, several banks have begun "easing" access to gold investment channels. China Construction Bank and Industrial and Commercial Bank of China have lowered product risk ratings, while Industrial Bank has extended trading hours. An announcement from China Construction Bank on May 25 showed an adjustment in the names of product risk levels and client risk tolerance levels. The personal gold accumulation business maintained its R4 risk rating, but the description changed from "relatively high risk" to "medium-high risk." Industrial and Commercial Bank of China also adjusted its Ruyi Gold Accumulation business. On May 12, it announced that effective May 19, 2026, the product risk level for this business would be adjusted to R2 (medium-low risk), corresponding to a client risk tolerance level of C2 (conservative) or above. Industrial Bank, in collaboration with Jingdong Jinyue (Xiamen) Digital Technology Co., Ltd. since April this year for gold accumulation distribution, announced that starting May 8, 2026, the trading hours for its mobile and online banking gold accumulation current and regular term products (excluding physical redemption) would be extended from 9:00–23:00 on trading days to 9:00–2:00 the following morning. Industrial Bank stated that due to multiple factors causing significant volatility in precious metal prices, to mitigate potential risks from market fluctuations, it would adjust business service hours as needed based on gold market changes and disclose information to clients accordingly. Previously, banks including China Construction Bank, China Merchants Bank, Bank of Jiangsu, and China Minsheng Bank had already extended gold accumulation trading hours and introduced night trading services. Tian Lihui believes the banks' adjustments to gold risk labels reflect a prudent reassessment following a decline in volatility, but this does not equate to a bullish trend outlook. China Construction Bank's subtle change from "relatively high" to "medium-high" risk description is primarily because gold's sharp short-term volatility has moderated after its nearly 20% retreat from the $5,600 high. "Risk rating adjustments are lagging indicators, and bank retail businesses focus more on client suitability management than market predictions," Tian Lihui noted, warning against interpreting such moves as "policy support signals." The recent easing of investment restrictions by multiple banks is actually an adaptation to the natural market correction and risk repricing, not a fundamental revision of gold's long-term investment thesis. Wu Zewei, a special researcher at Suzhou Bank, also stated that the recent synchronized adjustments by banks to their gold accumulation businesses are more an objective response to a phase of reduced market volatility rather than a directional judgment on future gold price movements. This round of adjustments reflects that gold accumulation businesses are transitioning from passive reactions to proactive adaptation, with risk management systems becoming more refined. Has the valuation logic changed? The market is undergoing a rebalancing from a "safe-haven driven" to an "interest rate pricing" logic. "The consecutive decline in international spot gold since May is primarily driven by a reversal in policy expectations triggered by stronger-than-expected US inflation data," Tian Lihui pointed out. April's CPI at 3.8% year-on-year (core at 2.8%) disrupted the disinflationary momentum, pushing the 10-year US Treasury yield to 4.66% and the 30-year yield above 5.2%, significantly increasing the holding cost of gold as a zero-yield asset. Tian Lihui added that this was compounded by India's sudden increase in gold import tariffs from 6% to 15%, dampening physical demand, and a temporary dulling of geopolitical safe-haven sentiment. Multiple negative factors converged. Market expectations for a Federal Reserve rate cut this year have plummeted, with discussions even emerging about potential hikes in 2027. The prospect of a prolonged high-interest-rate environment beyond expectations directly suppresses gold's valuation logic. Can sustained central bank gold purchases globally offset the downward pressure on prices? Tian Lihui indicated a temporal mismatch between the long-term logic of central bank buying and short-term trading dynamics. In Q1 2026, global central banks were net buyers of 244 tons of gold, above the five-year average, but such allocations are strategic, executed steadily without market timing. Tian Lihui stated that the current gold price decline is led by the rapid withdrawal of trading capital, with gold ETFs experiencing historic outflows and hedge funds sharply reducing net long positions. Current central bank buying volume accounts for only about 20% of annual global gold demand, insufficient to counter the impact of short-term leveraged position unwinding and speculative selling. The market is experiencing a rebalancing from a "safe-haven driven" to an "interest rate pricing" logic. Looking ahead, a Dongfang Jincheng research report noted that fundamental disagreements remain between the US and Iran on core issues like nuclear programs, leaving significant uncertainty over any agreement. Simultaneously, rising market expectations that the Fed may not cut rates this year, or even resume hikes, will continue to pressure gold prices. Overall, Middle East tensions will still dominate short-term gold price volatility. Supported by agreement expectations, gold prices are likely to exhibit a relatively strong, oscillating recovery pattern. "The core contradiction in the current gold market lies in the repeated tug-of-war between expectations for geopolitical de-escalation and the risks of actual implementation," mentioned a Cinda Futures research report, adding that the market is willing to briefly trade on de-escalation hopes but remains skeptical that conflicts are truly ending. Cinda Futures' report stated that, overall, gold remains in a state of flux with poor trend continuity. Trading strategies should avoid chasing rallies or selling panics, and are better suited to rhythm trading around key data and news events. The long-term bullish thesis remains unchanged, with each pullback to support levels viewed as potential entry points for long positions.