I just reviewed the charts and gold is taking a serious beating. It recently fell below $4,350, losing more than $1 billion in hours. Along with silver, the combined losses are around $2 billion. Usually, in geopolitical crises like Iran's, gold rises, but this time everything is the opposite. So, why is gold dropping today if everything points to it should be rising?

The main reason is obvious if you look at bond yields. The 10-year U.S. Treasury yield is at 4.40% and has risen significantly in recent weeks. When bonds yield more, people prefer that over holding non-interest-bearing gold. Additionally, the Federal Reserve isn't going to cut rates soon as previously expected. With energy inflation still present, markets are betting on a more restrictive monetary policy for longer.

There's another factor explaining why gold is down today: liquidity pressure. When oil prices rose, traders needed more cash to maintain positions, so they sold gold quickly. It's mechanical liquidation, not panic. Gold is the most liquid asset, so it's always the first to go. Triggered stop-loss orders accelerated the decline.

The odd thing is that oil stabilized and stock futures turned positive, but gold kept falling. According to The Kobeissi Letter, this suggests that some large player is being liquidated. There are also liquidity droughts in the market, fewer buyers at certain levels, causing those sharp drops.

Now, how low could it go? Gold has already fallen more than 14% in the last month. Analysts see $4,304 as an important support. If it holds there, a rebound could occur. But if it drops below, the next targets are $4,270 to $4,200.

The situation remains uncertain. JP Morgan and other big banks still see gold at over $6,000 in the long term, but in the short term, everything depends on how yields and liquidity evolve. Peter Schiff says this massive sell-off makes no sense; inflation should support gold. He has a point: when real rates fall, gold usually rises. So, the question many are asking is why gold is falling today in this context. For now, markets are nervous, waiting to see if gold stabilizes or if more pressure is ahead.