Gold has fallen sharply since January, with a 25% drawdown due to rising liquidity and global tensions. Paul Wong, Managing Partner at Sprott, stated that the decline was due to a system suddenly short of cash. Wong noted that the unwinding of short-dollar trade has exacerbated the decline. The closure of the Strait of Hormuz during the Iran-linked conflict has exacerbated reserve accumulation in Gulf states. Since the freezing of Russia's foreign exchange reserves in 2022, sovereign buyers have been shifting towards Treasuries. The same geopolitical impact is also affecting capital expenditure planning and future commodity supply.