Gold ETFs Log Worst Week in 15 Years Amid Iran War Jitters: Buy the Dip?

Core Insights - Gold prices experienced their steepest weekly loss in 15 years, dropping 9.6%, marking the largest decline since September 2011, and are on track for the worst monthly performance since October 2008 [1] - The SPDR Gold Trust (GLD) retreated 10.4% last week but is still up approximately 3.8% in 2026 due to prior gains before the Middle East crisis [2] Market Dynamics - The ongoing U.S.-Iran conflict has led to significant volatility in global markets, particularly in commodities, with oil prices surging past $112 per barrel, raising inflation and economic stability concerns [3] - The U.S. dollar has strengthened amid geopolitical tensions, with the Invesco DB US Dollar Index Bullish Fund (UUP) increasing by 2.2% over the past month [4] - Rising U.S. Treasury yields, which increased from 4.05% to 4.39% in March 2026, are limiting gold's upside as higher yields make interest-bearing assets more attractive compared to non-yielding assets like gold [6] Investor Sentiment - Concerns about overvaluation are emerging as gold has risen significantly, with GLD gaining about 50% over the past year, leading some investors to be cautious about increasing exposure [7] - During market stress, investors may sell safe-haven assets to raise cash, which can temporarily pressure gold prices before they regain momentum [8] - The recent selloff in gold reflects a reversal of momentum-driven gains seen prior to the U.S.-Israel strikes on Iran, with much of the earlier rally now "completely unwound" [9] Future Outlook - 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 [10] - Despite short-term volatility, the broader outlook for gold is tied to structural factors rather than daily market movements, suggesting that risk-tolerant investors may find current dips as buying opportunities [13]