"In Chaotic Times" Sharply Downward, Why Has Gold Become the Weakest Asset?

📉 Decline Overview

Early 2026 broke through the historical high   $5,000+
          ↓
Continuous decline after the outbreak of the Iranian war
          ↓
Current price               $4,587
Cumulative decline            Approximately -11%

In 2025, gold's annual increase reached 65%, and now it has plummeted in the "turmoil" – this is the real paradox worth questioning.

🔑 Why the decline? An Intuitively Unconventional Chain

On the surface, Middle East war = safe-haven demand = gold price increase.

But the actual chain of transmission is as follows:

Outbreak of Iranian war
    ↓
Strait of Hormuz blockade → Oil price skyrockets to $110+
    ↓
Reignition of inflation expectations (core PCE rises to 4.1% year-on-year)
    ↓
Fed rate cut expectations delayed or even disappear
    ↓
Real interest rates remain high
    ↓
Gold (zero-interest asset) loses appeal
    ↓
Continuous decline

Saxo Bank's head of commodity strategy, Ole Hansen:

"Gold is falling, not due to long-term fundamental deterioration, but because the Iranian war has abruptly reversed the macro background."

📊 Triple Pressure Superimposed

🤔 Why is the "Safe-Haven Logic" Ineffective?

It's not ineffective; it is overpowered by a stronger force.

Gold is facing two contradictory signals at the same time:

✅ Geopolitical risks rise → Should buy gold
❌ Oil price drives up inflation → Rate cuts further away → Higher real interest rates → Sell gold

The latter is currently gaining the upper hand. This means that the pricing framework for gold has shifted back from "de-dollarization/safe-haven" to the more traditional **"real interest rate" logic**.

💡 What Can Stop Gold from Falling and Bounce Back?

Saxo Bank analysts gave the most direct answer:

"Reopening of the Strait of Hormuz and a drop in oil prices are the biggest catalysts for gold's short-term upside."

Logic loop:

The U.S. and Iran cease hostilities → Strait reopens → Oil prices retreat
→ Inflationary pressure eases → Interest rate cut expectations return
→ Real interest rates fall → Gold rebounds

📐 Technical Reference