Gold drops below $4,500—how to capture gold price volatility on Gate TradFi?

Since May 2026, the international gold market has continued to face selling pressure. On May 26th, at the New York close, spot gold fell 1.45%, to $4,504.35 per ounce, continuing its overall decline, with a fresh intraday low of $4,482.79 at 02:05 Beijing time. During the Asian session on May 27th, spot gold even briefly fell below the $4,500 level, down 0.16% for the day, around $4,500.

This round of decline shows a clear abnormal phenomenon of “geopolitical conflict escalation, yet gold falling.” On May 25th, U.S. military conducted a self-defense strike in southern Iran, sharply escalating geopolitical tensions, but spot gold did not rise as traditional logic would suggest; instead, it broke below $4,550.

The core reason is that the market’s trading logic has shifted from “geopolitical safe-haven” to “inflation and interest rate expectations.” “After the U.S. suddenly launched an attack on Iran, spot gold instead broke below $4,550, reflecting that the current market trading logic has shifted from ‘geopolitical safe-haven’ to ‘inflation and interest rate expectations,’” said Li Gang, Director of Research at the China Foreign Exchange Investment Research Institute. The market is more concerned that the risk of the Strait of Hormuz will push up oil prices and reignite global inflation pressures, thereby forcing the Federal Reserve to maintain high interest rates or even delay rate cuts.

Triple Negative Shock Resonance: The Underlying Logic of Short-term Pressure on Gold

The recent decline in gold prices is not caused by a single factor but is the result of a resonance of a strong dollar, soaring U.S. Treasury yields, and rising rate hike expectations.

Rising real interest rates and a strong dollar are the core factors suppressing gold prices. Gold itself does not generate interest, and rising U.S. Treasury yields directly increase the opportunity cost of holding gold. On May 19th, the 10-year U.S. Treasury yield surged to 4.687%, hitting a new high since January 2025; the 30-year long-term bond yield rose to 5.197%, refreshing nearly 19-year highs. Meanwhile, the dollar index rose to 99.30, a six-week high. The long end of the U.S. Treasury yield curve moved significantly higher, with funds more inclined to flow back into fixed-income assets, greatly reducing the attractiveness of gold investments.

Sudden changes in monetary policy expectations further pressure gold prices. U.S. April CPI increased by 3.8% year-over-year, core CPI rose 2.8% YoY, both exceeding market expectations; PPI increased by 6.0% YoY, the highest since December 2022. These data significantly heightened market concerns about persistent inflation, directly cooling expectations for rate cuts by the Federal Reserve within the year. The monetary market has almost wiped out all rate cut expectations for 2026 and has begun pricing in possible rate hikes in 2027. According to CME FedWatch data, the market’s probability of a 25 basis point rate hike in December rose to 49.5%.

Traditional safe-haven logic has already “failed” under the current macro framework. The risk of supply chain disruptions caused by Middle East conflicts further fuels global inflation anxiety, while stubborn high inflation feeds back to force the Fed to maintain hawkish policies, forming a complete negative feedback loop. Geopolitical risks in the current market environment have become amplifiers of inflation expectations.

Divergence of Investment Bank Views: Short-term Pressure vs Long-term Optimism

Faced with the sharp decline in gold prices, opinions among international investment banks have shown clear divergence.

In the short term, many institutions have lowered their gold price forecasts. JPMorgan lowered its 2026 average gold price forecast from $5,708 to $5,243, citing weakening short-term demand. Citibank publicly expressed a cautious outlook, predicting gold will reach $4,300 within the next three months. UBS, affected by high U.S. Treasury yields and a strong dollar, lowered its 2026 year-end gold price forecast from previously expected $5,900 to $5,500.

However, the long-term foundation for a gold bull market remains intact. Bank of America still maintains a forecast of $6,000 for gold in 12 months, pointing out that continued central bank purchases of gold globally remain a key driver of long-term gold appreciation. Nanhua Futures believes that under prolonged high oil prices, stagflation trading could become an important narrative for the next phase of precious metals rally, and pullbacks are still viewed as medium- to long-term buying opportunities. The factors supporting the medium- and long-term trend of gold have not changed—central banks’ continued gold buying demand remains strong, with global central banks net purchasing 244 tons in Q1, exceeding the five-year average; gold as a strategic asset to hedge against “fragmentation of the international order” and “sovereign credit currency risks” remains valuable.

How to Capture Gold Fluctuations on Gate TradFi?

In the face of intense volatility in the gold market, crypto asset investors now have a new way to participate.

Trade gold derivatives directly with USDT. Gate TradFi has expanded into a comprehensive trading platform covering CFD contracts, perpetual contracts, and spot tokens. In the precious metals sector, open interest in gold futures reached about $14.7 billion, positioning Gate as a leader in global precious metals derivatives. Users can trade traditional assets like gold using USDT through a unified account system, eliminating the need to switch between different platforms.

Multi-asset allocation strategies to respond to market rotations. When precious metals enter a consolidation phase, users can quickly switch to stock indices or energy markets; when crypto markets become active again, they can return to perpetual or spot markets. Gate TradFi has launched over 430 CFD assets and more than 70 tokenized stocks, with forex and metals trading offering leverage up to 500x, providing ample strategic flexibility.

Shift from single-market trading to multi-asset linkage observation. The market is gradually moving from “single-asset trading” to “multi-asset linkage observation,” with the relationship between gold and Bitcoin evolving from early positive correlation to dynamic divergence. For investors seeking risk balance, holding both precious metals and crypto assets on Gate TradFi can achieve better diversification.

Outlook and Trading Strategy Suggestions

In the short term, as long as oil prices stay high and U.S. Treasury yields remain volatile at high levels, gold may continue to face downward pressure. But in the medium to long term, the structural bull market for gold is not over. High global debt levels, persistent U.S. fiscal deficits, and ongoing diversification of central bank reserves continue to support the underlying bullish factors.

From a technical perspective, gold is currently oscillating within a broad range of $4,550–$4,600. Key support levels are around $4,380–$4,400. A confirmed breakout above $4,600 could push gold toward the $4,640–$4,660 zone. Investors should pay attention to the upcoming core PCE inflation data on May 28th—this is the Fed’s most closely watched inflation indicator. If the data exceeds expectations, rate hike expectations will intensify; if a turning point appears, gold may see a sustained recovery.

Summary

Gold falling below $4,500 is fundamentally the result of a resonance of triple negative shocks: rising real interest rates, soaring U.S. Treasury yields, and increasing rate hike expectations. The safe-haven logic has been overtaken by inflation expectations within the “high inflation—high interest rate” macro narrative. In the short term, high oil prices and tightening policies will continue to suppress gold; but from a medium- to long-term perspective, the underlying bullish factors—central bank gold purchases, de-dollarization trends, and high global debt—remain intact.

On the Gate TradFi multi-asset trading platform, investors can flexibly participate in gold CFD and perpetual contracts using USDT, without switching between different platforms. Multi-asset allocation not only helps seize gold’s short-term opportunities but also adapts to the accelerating rotation of global assets in this new normal. In volatile markets, more than predicting rises or falls, having efficient tools to capture volatility is what truly matters.