According to a research report from Galaxy Securities, short-term pressure does not alter the long-term rationale for gold, which remains dependent on the rebalancing of interest rates and credit. In the current environment of high oil prices and elevated interest rates, increased short-term volatility for gold is inevitable. However, from a medium- to long-term perspective, central bank gold purchases, reserve diversification, and geopolitical uncertainties continue to provide support. Overall, this round of adjustment reflects a change in pace rather than a reversal of trend. The consecutive declines in gold prices do not indicate a failure of its safe-haven status but rather a shift in its pricing logic from risk-driven to interest rate-driven. Recent gold prices have fallen for eight consecutive trading days, with a weekly drop exceeding 10%, which appears unusual against the backdrop of escalating geopolitical conflicts. However, the underlying reason is not a disappearance of safe-haven demand but a change in the variables the market is prioritizing. In the past, escalating conflicts often corresponded with capital inflows into gold, whereas currently, the market is primarily reacting to inflation and interest rate trajectories, leading to a temporary divergence between gold and geopolitical risks. Rising oil prices have boosted inflation expectations, and increasing real interest rates have become the core factor suppressing gold. Middle East conflicts have pushed oil prices above $100 per barrel, prompting the market to revise its inflation path upward. The Federal Reserve's March meeting raised the 2026 PCE and core PCE forecasts to 2.7%, while the dot plot indicated that most officials support only 0-1 interest rate cuts. Fed Chair Powell also explicitly stated that rate cuts would not occur until inflation shows clear signs of decline. Against this backdrop, expectations of rising real interest rates have increased the opportunity cost of holding non-yielding assets like gold, becoming the primary driver of this correction. A stronger U.S. dollar combined with rising interest rates has exerted sustained pressure on gold. Revised inflation expectations and tighter policy paths have renewed support for the dollar, leading to capital flowing back into dollar-denominated assets. Since gold is priced in dollars, a stronger dollar directly weighs on gold prices. From an asset allocation perspective, under the combination of "rising interest rates and a stronger dollar," capital tends to favor yield-generating assets over gold, a transmission chain that has been particularly evident in this market cycle. Liquidity squeezes and profit-taking have amplified volatility, giving gold's adjustment a distinct capital-driven characteristic. Amid heightened global market volatility, some institutions have been forced to liquidate highly liquid assets to meet margin requirements and portfolio adjustments, with gold serving as a key tool for raising cash. Additionally, gold prices have risen significantly over the past two years, climbing from $2,000 per ounce to nearly $5,000 per ounce, resulting in high market crowding. Geopolitical conflicts have instead acted as a trigger for profit-taking by long positions, magnifying the price adjustment. Central bank gold purchases continue to provide long-term support but are insufficient to offset short-term interest rate and capital shocks. Global central banks' net gold purchases in 2025 remain above 300 tons, offering structural support for gold prices. However, this demand is part of long-term allocation strategies, with a gradual pace that struggles to counteract the impact of short-term capital flows. Coupled with a slowdown in gold purchasing momentum in early 2026, the short-term market lacks stable buying interest, making prices more susceptible to shifts in macroeconomic expectations. From a broader framework, gold pricing is transitioning from a "credit logic" phase back to an "interest rate logic" phase. Previously, gold's rally was largely driven by de-dollarization and geopolitical risks. Currently, the market has reverted to the "inflation—interest rates—dollar" pricing chain. Under this framework, as long as real interest rates rise and the dollar strengthens, gold will struggle to maintain its upward momentum, even if risks continue to escalate.