Overview
- Gold has dropped 17% in March in its worst month since 1983, while government bonds also fell as the Iran conflict pushed energy costs higher.
- Higher oil prices lifted inflation pressures and likely interest-rate increases, which raised yields and made non-yielding assets like gold less appealing.
- Market plumbing worsened the slide as leveraged bets were unwound, exchange-traded funds saw redemptions, and silver crashed a record 36% in one session.
- Investors favored dollar liquidity and cash, with U.S. money-market funds rising about $60 billion to a record $7.86 trillion, even as some foreign central banks sold Treasuries.
- History suggests bonds often lose ground during wartime inflation shocks, and a typical 60-40 stock-bond mix is down roughly 3.5% this year, underscoring the strain on standard portfolios.