The sharp decline in gold prices this time is mainly caused by the combined effects of short-term market sentiment, policy expectations, and technical factors, which can be summarized as follows: 1. Severe "overbought" conditions and profit-taking: Since early 2026, gold and silver have experienced significant gains, accumulating a large amount of profit-taking positions. When prices hit new highs during periods of relatively thin liquidity, any negative signals can easily trigger a "domino effect," leading investors to sell off collectively and lock in profits. 2. Sudden change in Federal Reserve policy expectations: This is the most direct trigger. The market anticipates that the new Fed Chair nominee proposed by Trump may implement a more hawkish monetary policy, especially with the possibility of "balance sheet reduction" accompanying rate cuts. "Balance sheet reduction" means withdrawing dollar liquidity from the market, which directly pressures dollar-denominated gold. Meanwhile, institutions like the Chicago Mercantile Exchange have raised margin requirements, forcing some leveraged traders to close positions and exit, amplifying the decline. 3. Technical breakdown and algorithmic trading stampede: When gold prices break below key psychological levels, it triggers a large number of preset stop-loss sell orders. These algorithmic trades flood out in a short period, creating a vicious cycle of "decline - stop-loss triggered - further decline." #Gold