Overview
- Gold has fallen more than 20% from its January record after an initial wartime spike, leaving the metal in a bear market despite the Iran conflict.
- Analysts tie the drop to a stronger US dollar, expectations for higher interest rates and investors selling holdings to raise quick cash.
- Morgan Stanley notes the S&P 500-to-gold ratio is up about 12% since the fighting began, which it reads as a supportive signal for US stocks.
- UBS advises investors not to dump positions and still sees gold as useful portfolio insurance, while planners recommend a modest 5% to 10% allocation.
- The retreat follows a two-year surge fueled by central-bank and institutional buying, and the pattern of a brief jump then sharp selloff mirrors past market shocks.