The CD Markets precious metals and derivatives research team relies on the self-built gold long-term review model, the global central bank position high-frequency monitoring system and the options market sentiment quantification framework, combined with the recent extreme trends in the gold market, institutional differences and derivatives signals to conduct research and judgment: Since the high point in March 2026, gold has fallen by more than 20% in only 91 days, officially confirming that it has entered a technical bear market, with the fastest decline since the 2008 financial crisis. The market is currently in a deep game between "concentrated release of short-term liquidity shocks" and "unbroken long-term structural support". Gold prices still face downward pressure in June, but the macro environment is expected to gradually turn favorable in the second half of the year.

Review of extreme market conditions: 91-day lightning entered the bear, breaking the traditional risk aversion logic

Historical bear market data compiled by CD Markets show that this round of gold decline shows a rare feature of rapid decline: it only took 91 days from the phased high in March to the confirmation of the bear market in June, second only to the 23-day rapid decline during the 2008 financial crisis, and far exceeding the adjustment duration of previous bear markets such as 2006 (105 days), 2013 (411 days), and 2022 (538 days). As of early June, Comex gold futures hit a low of $4,046 per ounce, a cumulative drop of 21% from the record high of $5,600 in January, and the return during the year turned from positive to negative to -5%.

Contrary to traditional knowledge, this round of decline occurred against the background of the continued escalation of geopolitical conflicts in the Middle East, and the safe-haven properties of gold have almost completely failed. CD Markets market linkage monitoring shows that since the beginning of June, the correlation coefficient between gold futures and the Nasdaq Index has risen to 0.91, which is close to complete synchronization, showing the abnormal characteristics of "stocks and gold rise and fall at the same time." The essence is the systemic pressure of selling off all risk assets and safe-haven assets during the liquidity tightening cycle.

The core driver of the decline: interest rate expectations dominate, multiple negative resonances

CD Markets' analysis of the driving factors of this round of decline shows that the sharp increase in expectations for interest rate hikes by the Federal Reserve is the core force suppressing gold prices, and the influence of geological risks has given way to the rise in risk-free yields. The U.S. CPI soared to 4.2% year-on-year in May, hitting a new high since May 2023, completely eliminating market expectations of an interest rate cut within the year and pushing the probability of an interest rate hike to a record high. The 30-year U.S. bond yield exceeded 5%, and the 10-year yield rose to 4.535%, causing the holding cost of zero-coupon gold to rise sharply, and funds accelerated from the gold market to high-yield U.S. bonds.

In addition to interest rate factors, multiple negative margins further amplified the downward momentum:

1. Central Banks and Emerging Markets Sell-Off: Türkiye’s central bank sold gold to support its currency, Gulf countries reduced their reserves to finance wars, and India raised gold import tariffs to curb demand;
2. Technical breakdown triggers passive selling: After the gold price fell below the 200-day moving average and the key support level of $4,400, a large number of stop-loss orders poured out, forming a negative feedback of "fall → stop loss → further fall";
3. Withdrawal of speculative funds: CFTC’s non-commercial net long position in gold continues to decline, and trend trading funds have basically cleared their positions and left the market.

Extreme market signals: options bets plunge, gold mining stocks show divergence

CD Markets derivatives monitoring data shows that the current options market sentiment has fallen into extreme pessimism. Put option premiums accounted for as much as 65% of options trading around the gold ETF (GLD), with 8 of the 10 most active contracts on the day being put options. The most aggressive is a put option expiring in June 2028 with a strike price of $240, which corresponds to a bet that gold prices will fall by about 40% from current levels in the next two years.

However, in stark contrast to the extreme bearishness in the spot market, the gold mining sector has shown signs of funds going against the trend. The volume of call options traded on the VanEck Gold Mining Stock ETF (GDX) on the day was more than 2 times that of puts, and the number of call options bought was 3 times that of puts. CD Markets analysis believes that this departure is due to the cost advantage of gold mining companies: the current average mining cost of mainstream gold mining companies is about US$1,500 per ounce. Even if the gold price remains above US$4,000, it can still maintain huge profits. Compared with directly holding gold, the valuation performance of gold mining stocks has gradually emerged.

The long-short divergence intensifies: the game between short-term pressure and long-term bull market

The current market disagreement on the future trend of gold has reached historical extremes. The core contradiction lies in the game between short-term liquidity impact and long-term structural support.

• short view: It is believed that the Federal Reserve will maintain high interest rates or even continue to raise interest rates, U.S. bond yields still have room to rise, and gold prices may further drop to $3,800 or even lower;
• bullish view: Represented by senior analyst Jeff Clark, through cycle comparison, it was found that the correlation coefficient between the current market and the gold bull market from 1976 to 1980 is as high as 95%, almost replicating it point by point. Historically, there has been a sharp correction of more than 20% in the middle of this bull market, but in the end gold prices rose more than 7 times. According to this deduction, the current adjustment is just a normal fluctuation in the bull market, and there is still room for gold prices to rise nearly twice in the future.

CD Markets believes that the core logic of bulls has not been destroyed: the fiscal dilemma of US federal debt exceeding US$38 trillion and annual interest payments exceeding US$1.2 trillion has not changed, the global de-dollarization trend continues, and the long-term allocation value of gold as an asset without sovereign credit risk remains solid. Judging from the historical correction range, gold prices have corrected by 30% during the financial crisis in 2008, and by 28% when the epidemic hit in 2020. The current 21% decline has not yet reached the historical extreme level, and the possibility of a final decline cannot be ruled out.

CD Markets Outlook and Allocation Recommendations

CD Markets’ benchmark judgment on gold trends is:Will remain under pressure in the short term (June), the Federal Reserve’s June policy meeting may release further hawkish signals, and the technical short trend remains unchanged, and gold prices may test the support in the $3800-4000 range;It is expected to gradually stabilize and rebound in the mid-term (second half of the year), as inflationary pressures are marginally eased and downside risks to the U.S. economy emerge, expectations for the Federal Reserve to raise interest rates will gradually cool down, and gold prices will usher in a restorative rise;Still in an upward cycle in the long term (1-2 years), the long-term fiscal deficit and debt problems will continue to support the upward movement of the gold price center.

In terms of allocation suggestions, CD Markets recommends that investors adopt the strategy of "building positions in batches and laying out on the left": start gradually adding positions below $4,000, increase the allocation ratio near $3,800, and give priority to physical gold and low-cost gold mining stocks to avoid short chasing operations. For long-term investors, the current extreme decline is a golden window for allocating gold. The "disaster insurance" attribute and long-term hedging value of gold have not changed.