Russ Koesterich, portfolio manager for BlackRock’s Global Allocation Strategy, attributes the precious metal’s recent decline to a strengthening U.S. dollar and a sharp rise in real interest rates. As the Dollar Index climbed more than 6% from its January lows, gold lost its traditional safe-haven status, briefly becoming a source of portfolio risk rather than protection. Real 10-year yields, which rose from 1.65% in March to 2.20%, further stifled the asset's appeal.

Beyond macroeconomic pressures, gold is suffering from a lack of narrative momentum. Investors have pivoted heavily toward artificial intelligence stocks, favoring companies with aggressive earnings growth over non-yielding assets. Nevertheless, Koesterich maintains that structural concerns—including historic debt, fiscal deficits, and geopolitical instability—justify holding a modest position. While the metal recently traded at $4,074.70 an ounce, Koesterich suggests that the long-term case for diversification remains unchanged despite the current indifference from the broader market.