Gold isn’t your safe haven in this war: It just logged its biggest weekly drop in over 14 years

Core Insights - Gold prices experienced their largest weekly percentage drop in over 14 years, highlighting the impact of the Iran conflict on market dynamics, even for traditionally safe-haven assets [1] - The conflict has introduced significant uncertainty, which typically would increase gold demand, but broader economic factors have dominated [1] Market Dynamics - The potential end of the Federal Reserve's interest-rate-cutting cycle, and the possibility of rate hikes, have contributed to the decline in gold prices [2] - A rebound in the U.S. dollar and profit-taking activities have also influenced the market, with some traders using gold as a liquidity source to raise cash [2] Price Movements - On Comex, the April gold contract fell by $30.80, or 0.7%, settling at $4,574.90 per ounce, marking a weekly loss of 9.5%, the largest since September 23, 2011 [2] - For the month, gold has lost 12.8% [2] Silver Market - Silver, being more volatile, has seen a decline of over 14% for the week, with its May contract ending at $69.66 per ounce, down $1.55, or 2.2% [3] - Both gold and silver are experiencing sell-offs as traders aim to cut losses amid broader market panic [3] Reasons for Decline - Key factors for gold's decline include margin calls, a rise in value-at-risk, and changing market expectations for U.S. interest rates [4] - In times of market stress, traders liquidate winning positions to cover losses in other assets, leading to a sell-off in precious metals [4] - The increase in value-at-risk has prompted traders to scale back or close positions across all asset classes due to heightened market volatility [4]