So what are you saying? > We've got to dismantle it all > Rip off the paper, smash up the walls > How can it be that you love her? The singer further agonizes over the antagonist's actions. They've put a lot into the relationship, and now it's all for nothing.">
He is breaking up with the singer. She is in disbelief; she almost cannot understand the words he is saying.
When he breaks up with her, the singer expresses her disbelief to him, which causes him to raise his voice. She explains that she heard him the first time, but further emphasizes that she can't believe this is happening.
This stanza is particularly clever, simultaneously playing with the definition of alchemy as well as "make love". Alchemy is the mystical art of converting cheap metal into gold. In reality, alchemy doesn't actually work, but more on that later. The singer is saying that the antagonist metaphorically used alchemy to "make love where there was none." She is implying that he had sex with someone that he did not love, and now he thinks that he loves her. So there is an implied affair here.
Further, his actions caused their relationship to dissolve, and she completes the alchemy metaphor by saying "she is the golden one." In other words, his actions caused their relationship to disappear, and it is now replaced with the new love affair being the golden one. Now, some alchemists in history claimed that they could convert metal to gold, but it was a sham. In effect they only put a very thin layer of gold over normal metal to trick everybody. So in these lyrics there is an implication that although the new love affair is the golden one, it might not be pure gold as the antagonist is claiming. In other words, he's saying he loves her, but he's either lying or fooling himself. Either way, the singer's relationship with him is gone.
The singer further agonizes over the antagonist's actions. They've put a lot into the relationship, and now it's all for nothing.