Bullion goes bearish

The war in Iran, threats of stagflation, and the cancellation of the latest season of The Bachelorette are enough to send anyone sprinting for a safe haven. But after years of strong gains, gold is in a rut at the very moment the precious metal should be outshining the market.

Gold has fallen roughly 20% from its all-time high in early January, officially dipping into bear market territory at one point today. Things got really bad last week, when gold futures declined 10%, their worst single-week performance in 14 years.

What’s gone wrong with gold?

• Bond yields have surged, and since gold doesn’t pay interest, the precious metal has become less precious in the eyes of investors.
• Similarly, when the US dollar rises—as it has recently, with investors pouring money into the global reserve currency—gold tends to move in the opposite direction.
• Some central banks, which have been big buyers of gold in recent years, might be selling their stash in order to offset the costs of higher oil prices.
• After surging 60% in 2025, some investors are taking profits, or are just plain wary that the metal can’t rise much higher.

There’s one last reason for gold’s slump: TACO (Trump Always Chickens Out). Many traders may be hesitating to reallocate their portfolios and seek the safety of gold, instead betting that the president will announce a policy reversal any day now.

On that note, gold jumped this morning after President Trump postponed strikes on Iran’s energy infrastructure, helping to pare back some previous losses, before the commodity lost some ground later in the trading session. But even if the geopolitical quagmire continues, analysts are still bullish on gold long term, thanks to central banks continuing to buy bullion in bulk.

“Given the macroeconomic and political uncertainties beyond the risks arising from the US-Iran conflict, we continue to hold a positive view on gold,” wrote UBS Global Head of Equities Ulrike Hoffmann-Burchardi in a note earlier this month.

Stocks are polishing up nicely

One beneficiary of gold’s lackluster performance: Stocks.

Morgan Stanley Chief Equity Strategist Mike Wilson pointed out in a recent note that the S&P 500-to-gold price ratio jumped roughly 12% after the Iran conflict began. A higher ratio means that investors are comparatively optimistic about stocks, despite the geopolitical crisis and fears of rising inflation.

The silver gold lining: Gold’s decline may have less to do with the fundamentals of the asset itself, and more to do with the fact that investors just aren’t that worried about the Iran conflict and other macro headwinds.

Let’s hope they’re right.—LB