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A Few Reasons Why Gold ETFs Failed to Surge Amid Iran War
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Key Takeaways
Gold ETFs slipped despite geopolitical tensions due to a stronger dollar and rising Treasury yields.
Liquidity pressures and valuation concerns probably prompted investors to trim exposure to gold.
Rising oil prices are squeezing margins for gold miners since mining operation is energy-dependent.
Gold is a widely known safe-haven asset and tends to benefit during geopolitical turmoil, but the metal has remained largely range-bound amid the latest Middle East conflict involving Iran, the United States and Israel.
Gold bullion ETF SPDR Gold Trust (GLD - Free Report) lost 1.5% last week (as of Mar. 13, 2026)a decline even steeper than that of SPDR S&P 500 ETF Trust (SPY - Free Report) (which fell about 0.6% during the same time frame). Meanwhile, VanEck Gold Miners ETF (GDX - Free Report) lost 5.3% last week. Let’s find out why gold bullion and mining ETFs are out of favor amid the current conflict.
Strong Dollar: A Negative for Gold
Note that the U.S. dollar has been gaining amid the current geopolitical tension. Invesco DB US Dollar Index Bullish Fund (UUP - Free Report) added 1.3% last week and has jumped about 3.6% over the past one month (as of Mar. 13, 2026).
Although the U.S. currency underperformed in recent months and is even down 1.4% over the past one-year period, the latest rally in the safe-haven currency – the greenback – went against the gold rally. Gold is priced in U.S. dollars, and hence any uptick in that currency acts against the yellow metal.
Uptick in U.S. Treasury Yields
The benchmark U.S. Treasury yield started the month at 4.05% and hit 4.28% on Mar. 13, 2026. Rising Treasury yields are limiting gold’s upside. Higher yields tend to boost the appeal of interest-bearing assets like government bonds, reducing demand for non-yielding assets such as gold.
At the same time, surging oil prices amid the Iran war have heightened concerns about persistent inflation, which could push central banks to keep interest rates elevated.
Overvaluation Concerns?
Gold has experienced a significant rise in recent months, with GLD gaining about 66% over the past year. It is no surprise that some investors are cautious about increasing exposure to bullion, citing overvaluation concerns.
Need for Cash?
During periods of market stress, investors sometimes sell even traditional safe-haven assets to raise cash. After all, at times of heightened uncertainty, cash often behaves like king. Such liquidity-driven selling may temporarily pressure gold prices before the metal regains momentum.
Oil Rally: A Negative Gold Miners
Gold mining is heavily dependent on fuel, with 15–20% of all-in operating costs (per goldmoney.com) directly tied to energy (diesel for heavy equipment, electricity). The same source also highlights that beyond the diesel and electricity required to extract and process the metal, energy is needed to ventilate and cool underground mines as well. So, a sharp oil rally, like the one currently underway, is a key negative for miners’ profitability.
What Lies Ahead?
Despite the near-term pressure, major banks remain optimistic about gold’s longer-term prospects. Analysts at JPMorgan Chase expect the metal to climb to around $6,300 per ounce by the end of 2026 (as quoted on CNBC), while Deutsche Bank maintains a year-end target near $6,000.
Gold dropped to $5,050 per ounce on Friday (per Trading Economics). Hence, these banks’ views suggest a bullish outlook. We suggest investors keep track of oil prices, inflation and bond yield momentum — factors that could weigh on a gold rally.
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A Few Reasons Why Gold ETFs Failed to Surge Amid Iran War
Key Takeaways
Gold is a widely known safe-haven asset and tends to benefit during geopolitical turmoil, but the metal has remained largely range-bound amid the latest Middle East conflict involving Iran, the United States and Israel.
Gold bullion ETF SPDR Gold Trust (GLD - Free Report) lost 1.5% last week (as of Mar. 13, 2026)a decline even steeper than that of SPDR S&P 500 ETF Trust (SPY - Free Report) (which fell about 0.6% during the same time frame). Meanwhile, VanEck Gold Miners ETF (GDX - Free Report) lost 5.3% last week. Let’s find out why gold bullion and mining ETFs are out of favor amid the current conflict.
Strong Dollar: A Negative for Gold
Note that the U.S. dollar has been gaining amid the current geopolitical tension. Invesco DB US Dollar Index Bullish Fund (UUP - Free Report) added 1.3% last week and has jumped about 3.6% over the past one month (as of Mar. 13, 2026).
Although the U.S. currency underperformed in recent months and is even down 1.4% over the past one-year period, the latest rally in the safe-haven currency – the greenback – went against the gold rally. Gold is priced in U.S. dollars, and hence any uptick in that currency acts against the yellow metal.
Uptick in U.S. Treasury Yields
The benchmark U.S. Treasury yield started the month at 4.05% and hit 4.28% on Mar. 13, 2026. Rising Treasury yields are limiting gold’s upside. Higher yields tend to boost the appeal of interest-bearing assets like government bonds, reducing demand for non-yielding assets such as gold.
At the same time, surging oil prices amid the Iran war have heightened concerns about persistent inflation, which could push central banks to keep interest rates elevated.
Overvaluation Concerns?
Gold has experienced a significant rise in recent months, with GLD gaining about 66% over the past year. It is no surprise that some investors are cautious about increasing exposure to bullion, citing overvaluation concerns.
Need for Cash?
During periods of market stress, investors sometimes sell even traditional safe-haven assets to raise cash. After all, at times of heightened uncertainty, cash often behaves like king. Such liquidity-driven selling may temporarily pressure gold prices before the metal regains momentum.
Oil Rally: A Negative Gold Miners
Gold mining is heavily dependent on fuel, with 15–20% of all-in operating costs (per goldmoney.com) directly tied to energy (diesel for heavy equipment, electricity). The same source also highlights that beyond the diesel and electricity required to extract and process the metal, energy is needed to ventilate and cool underground mines as well. So, a sharp oil rally, like the one currently underway, is a key negative for miners’ profitability.
What Lies Ahead?
Despite the near-term pressure, major banks remain optimistic about gold’s longer-term prospects. Analysts at JPMorgan Chase expect the metal to climb to around $6,300 per ounce by the end of 2026 (as quoted on CNBC), while Deutsche Bank maintains a year-end target near $6,000.
Gold dropped to $5,050 per ounce on Friday (per Trading Economics). Hence, these banks’ views suggest a bullish outlook. We suggest investors keep track of oil prices, inflation and bond yield momentum — factors that could weigh on a gold rally.