On March 25, attention was drawn to the significant sell-off in gold, which erased all its gains for the year, followed by a strong rebound driven by US signals of negotiations with Iran. This volatility sparked discussions in the market about whether investors should abandon gold. Considering the current macroeconomic environment, changes in geopolitical situations, and the core logic of the gold market, an analysis was provided on gold's short-term fluctuations and long-term value to offer professional insights for market participants.

Specifically, the price of gold recently fell sharply, recording one of the most severe short-term declines in decades and completely wiping out its gains since the beginning of the year. It was indicated that this sharp drop in gold prices was not due to a single factor. Key drivers included expectations of rising interest rates fueled by increasing energy prices, pressure from a strengthening US dollar, and weak physical demand due to supply disruptions in the Middle East. Additionally, profit-taking by institutional investors and sovereign nations added to the downward pressure, collectively pushing gold prices significantly lower. However, on Monday, when the US president announced a five-day delay in strikes on Iranian energy infrastructure, market sentiment eased despite Iran's denial of any negotiations, leading to a substantial rebound in gold prices. This highlighted gold's high sensitivity to changes in geopolitical narratives.

From the perspective of market core logic, the current global market environment is characterized by rising nominal yields, a stronger US dollar, and a shift in interest rate expectations. The market has moved from pricing in rate cuts to considering the possibility of small rate hikes, creating significant headwinds for gold, a non-yielding asset. Outflows from gold ETFs, which saw sales of approximately 62 metric tons in March, further intensified the downward pressure on prices. Strategists from UBS noted that gold does not necessarily rise during the initial stages of conflict, as macroeconomic forces often dominate its price trends. This view is corroborated by recent market movements—despite escalating geopolitical tensions, gold did not experience the expected surge but instead showed high volatility, leaving many investors puzzled.

It was assessed that, in the short term, gold prices will continue to be influenced by the Federal Reserve's policy stance, geopolitical developments, and the trajectory of the US dollar. If the Fed shifts decisively toward tightening policies and real yields remain high, gold prices may extend their corrective trend. Conversely, if geopolitical tensions ease further and policy expectations turn dovish, gold could continue its rebound. Meanwhile, as a traditional safe-haven asset, gold's price fluctuations are closely tied to market sentiment. Currently, there is significant divergence in market views on gold, and repeated shifts in sentiment are likely to amplify short-term volatility. This aligns with the previous judgment that the gold market is experiencing short-term turbulence while maintaining long-term safe-haven value.

In conclusion, it was determined that the recent sharp sell-off in gold does not represent a structural turning point and should not be interpreted as a loss of gold's intrinsic value. Instead, it should be viewed as a normal adjustment period amid changing macroeconomic conditions. In the short term, gold is expected to remain volatile, with close attention needed on Federal Reserve policy moves, geopolitical developments, and US dollar trends. Over the long term, gold's role as an effective hedge in investment portfolios remains unchanged. As economic growth slows and monetary policies gradually ease, gold prices are likely to recover steadily. Therefore, now is not the appropriate time to abandon gold. Market participants are advised to rationally assess short-term fluctuations and strategically plan for long-term allocations.