Gold and silver have lost a combined $12.95 trillion in market value over 132 days as the US-Iran war upends traditional safe-haven demand. Gold tumbled 26.5% from its January peak, erasing $9.75 trillion, while silver plunged 47.69%, shedding $3.2 trillion.
Why safe-haven metals are falling
The rout is tied directly to the conflict reshaping how investors and central banks treat precious metals. Turkey's central bank and Gulf nations — Qatar, the UAE and Saudi Arabia — are selling gold to support their currencies and fund war-related expenses. That selling pressure has overwhelmed typical buy-the-dip demand.
Gold has now dropped below its 200-day moving average by the largest margin since 2022, a technical signal that often draws more sellers. The war, rather than boosting gold as a crisis hedge, has triggered a wave of liquidation as nations convert bullion into cash.
Citigroup and the options market signal more pain
Wall Street is bracing for further downside. Citigroup lowered its three-month gold price target to $4,000 per ounce from $4,300, citing limited near-term catalysts for a recovery. The bank expects the metal to struggle until the conflict's trajectory becomes clearer.
The options market tells a similar story. Of the $200 million in premium tied to the GLD gold ETF, $130 million went into puts — bets that prices will fall. Eight of the ten most active GLD option contracts are puts. One June 2028 put contract carries an $11.50 premium and wagers on a 40% decline from current levels.
What comes next for gold
Economist Peter Schiff argues that a prolonged US-Iran conflict could push gold to retest its March low of $4,098. That would represent another 6-7% drop from recent levels. The metal's fall below its 200-day moving average by this much hasn't happened since 2022, raising the risk of a deeper correction before any floor appears.
For now, the selling from central banks and bearish options positioning dominate. Investors are watching whether the war escalates further, which could either extend the rout or eventually revive gold's safe-haven status once the liquidation wave passes.
