Despite the continued escalation of geopolitical conflicts, the performance of gold, a traditional safe-haven asset, has been anomalous recently. Throughout March, COMEX gold futures prices on the New York Mercantile Exchange fell by over 13% at one point, marking the worst monthly record since October 2008. This trend puzzled many experienced investors, given that gold should have reinforced its anti-inflation and safe-haven attributes against the backdrop of rising crude oil prices and escalating Middle East tensions. By late March, the core changing logic of the market gradually became clear, primarily stemming from sell-off behaviors by some national official reserve institutions.

According to weekly data released by the Central Bank of Turkey, starting from the week of March 13, the bank continuously reduced its gold reserves for three consecutive weeks, selling a cumulative 126.4 tons. This is the largest single reduction action by the country since 2018. Meanwhile, the President of the Polish Central Bank also publicly stated plans to sell part of its gold reserves, aiming to raise approximately 13 billion U.S. dollars to support defense construction. These two actions directly impacted market confidence, causing the COMEX gold futures main contract price to probe down to $4,128.9 per ounce in late March. Data released by the U.S. Commodity Futures Trading Commission further corroborated the withdrawal of institutional capital. As of the week ending March 24, asset management institutions dominated by hedge funds reduced their net long positions in gold futures and options by 1,314,400 ounces, with the reduction scale reaching a monthly peak.

The current downward pressure on gold prices is mainly suppressed by two forces. On one hand, market expectations for Federal Reserve interest rate cuts are cooling, pushing up the U.S. Dollar Index; on the other hand, multiple central banks concentrating on reducing gold reserves have weakened the market force originally seen as a key buyer support. As of the morning of April 3, although the COMEX gold futures main contract quote had rebounded to near $4,689.8 per ounce, there is still divergence on whether it can quickly recapture the ground lost in March. Wall Street investment institutions are now beginning to guard against a potential risk point: if Middle East hostilities lead to sustained high oil prices, more central banks may be forced to sell gold reserves, liquidating assets to raise funds to cope with domestic currency depreciation pressures and procure high-priced energy. This potential vicious cycle could become a long-term hidden danger suppressing gold prices.