A Few Reasons Why Gold ETFs Failed to Surge Amid Iran War

Core Insights - Gold remains a safe-haven asset but has been range-bound amid the ongoing Middle East conflict involving Iran, the U.S., and Israel [1] Group 1: Market Performance - SPDR Gold Trust (GLD) lost 1.5% last week, underperforming compared to SPDR S&P 500 ETF Trust (SPY), which fell about 0.6% [2] - VanEck Gold Miners ETF (GDX) experienced a decline of 5.3% last week [2] Group 2: Economic Factors - The U.S. dollar has strengthened, gaining 1.3% last week and approximately 3.6% over the past month, negatively impacting gold prices [3][4] - U.S. Treasury yields rose from 4.05% to 4.28% in early March 2026, limiting gold's upside as higher yields make interest-bearing assets more attractive [5] - Concerns about overvaluation are present, with GLD increasing by about 66% over the past year, leading some investors to be cautious [6] Group 3: Investor Behavior - During market stress, investors may sell safe-haven assets like gold to raise cash, which can temporarily pressure gold prices [7] - Major banks remain optimistic about gold's long-term prospects, with JPMorgan Chase predicting a price of around $6,300 per ounce by the end of 2026 and Deutsche Bank targeting near $6,000 [9] Group 4: Industry Challenges - Rising oil prices are negatively affecting gold miners' profitability, as 15-20% of their operating costs are tied to energy [8][10] - Gold prices dropped to $5,050 per ounce, indicating potential challenges ahead despite bullish long-term forecasts from banks [11]