Gold bearish, dollar index bullish, treasury yields higher amid Iran war- Why is the safe haven crashing?

Gold and silver have seen a significant decline in their prices as the war in West Asia stretches into the fourth week and the energy crisis continues. Gold is trading at $4,354 per ounce, falling from $5,200 per ounce on March 13. The precious metal rallied at the beginning of 2026, reaching its all-time high of $5,595.51 before losing momentum, falling roughly 22 per cent and entering the bearish market. As of March 23, the price of 24 karat gold is ₹14,017 per gram, and 22 karat gold is ₹12,850 per gram in New Delhi.

Why is gold crashing?

The war between the US and Iran has entered its 4th week, while gold was supposed to act as a hedge against inflation and volatility, it is acting volatile itself. Several forces are contributing to the fall of the precious metal, like soaring energy prices indicating inflation is going to be stickier, Feds maintaining a steady rate in fear of inflation, high treasury yields, and the dollar index remains bullish. So, making non-yielding assets like gold less attractive to the dollars and treasuries.

Energy prices remain high-

As the blockade on the Strait of Hormuz continues, and a looming blockade on the Bab-el-Mandeb, the benchmark of oil Brent crude is hovering over $110-$115 per barrel. Indicating that inflation is going to be stickier, the US Federal Reserve is expecting the inflation to be above the 2 per cent target.

Fed hold the interest rates-

The US President Donald Trump said in his Truth Social post on Wednesday, “When is ‘Too Late’ Powell lowering INTEREST RATES?" The Federal Reserve was forced to keep the rate steady at 3.5–3.75 per cent, as the job market stagnates, with unemployment rising to 4.4 per cent, and the growing uncertainty over the US war on Iran.

Dollar Index remains bullish-

Dollar Index remains higher, since the start of the war on February 28, the Dollar have increased by at least 2.8 -3 per cent. As investors are betting on the US military's invincibility. It was 97.61 before Operation Fury, then it moved to the highest 100.43 on March 18, before falling to 99.72 on March 23.

Treasury yields higher-

The sell-off in the Treasury market continues, the 2-year Treasury yield is 3.98 per cent, and the 10-year yield is rising to 4.423 per cent, which is the highest level since July 2025.

Also Read: US issues worldwide travel alert as Iran war escalates, after Trump's 48-hour ultimatum

What is the outlook for Gold?

Both JP Morgan and Deutsche Bank continue the year-end target price for gold at $6,300 and $6,000 per ounce, respectively. Neither bank has revised its projection, taking into consideration the recent volatility in the prices of the precious metal and the energy market. For the scenario that the US wins the war in Iran, and there is no significant damage to the energy infrastructure in West Asia, as well as the GCCs. Oil prices fall back to $65-$70 per barrel, and the advanced economies absorb the shock, dollar weakens as the rate cut resumes to monetise the ballooning debt. So gold begins its rally again, but slowly. If the war drags on for a long time, the oil market rises to $140-$150 per barrel, high energy prices keep the inflation high, then the stock market remains bearish, dollars remain strong at first but sees a free fall as the war extends, yields remain high as long as there is no rate cut, and accelerate debt accumulation, gold remains bearish before heading for bullish as the debt bubble pops. So in the super cycle, gold is most likely to rally, and this might just be the appropriate window to purchase gold.