# Gold Crashes 10% in a Day: The Safe-Haven King Loses Its Crown

Gold has plunged nearly 20% from its January all-time high, approaching a technical bear market. Since the Iran conflict erupted, it's already down 10%.

By conventional logic, escalating geopolitical tensions should drive gold higher. So why is this time different?

The market has repriced interest rate expectations: rate cuts are now pushed back to late 2026 or beyond, and "higher for longer" has become consensus. Meanwhile, oil prices have surged due to Middle East tensions, pushing up inflation expectations, which in turn reinforces the high-rate environment. High real interest rates are gold's biggest enemy.

More notably, when adjusted for M2 money supply, gold's current valuation is approaching the historical peaks of 1974 and 2011. In other words, despite the nominal price decline, relative to global liquidity, gold is still at elevated levels.

Wall Street has surrendered. The latest Kitco survey shows institutional analysts collectively bearish on gold's near-term outlook, with retail sentiment also turning pessimistic.

An interesting phenomenon: since gold broke below $5,000, its movement has become highly correlated with BTC. Two candidates for "digital gold" are being repriced on the same battlefield.

So who is the true store of value?