The sharp drop in gold prices may have been linked to gamma squeezes. According to institutional analysis, the decline at the end of last month was heavily influenced by the options market.

A gamma squeeze is essentially a phenomenon where options holders buy or sell futures or Gold ETFs to rebalance their portfolios as the price passes through certain levels. This accelerates price movements.

Last month, a large number of options expired at the SPDR Gold ETF with strike prices of $465 and $455, and there were also massive positions concentrated around $5300, $5200, and $5100 in CME March and April options. When prices pass through these levels, gamma squeezes tend to be triggered more easily. In other words, the decline in gold prices may have been significantly affected by technical factors.