Gold fell $310 to $4,551/oz (-7.2%) in a single day, while silver plummeted from $77.77 to $66.93 (-13.9%). This marks the sixth consecutive trading day of decline for gold, setting the longest losing streak since the end of 2024. The typical logic is that war pushes up safe-haven assets, but this time is different—a strengthening US dollar index (DXY +0.4%), rising US Treasury yields, and inflation expectations driven by oil price surges have dashed hopes of the Federal Reserve turning dovish. Capital has been withdrawn from precious metals and redirected toward US dollar cash. In early February, CME raised gold margin requirements from 6% to 8% and silver from 11% to 15%, continuing to squeeze out leveraged long positions. On the surface, it appears to be a gold and silver collapse, but fundamentally, when inflation and war occur simultaneously, the pricing power of safe-haven assets has shifted from fear to interest rates.
Gold plunges 7%, silver plunges 14%, safe-haven logic fails during wartime
Gold fell $310 to $4,551/oz (-7.2%) in a single day, while silver plummeted from $77.77 to $66.93 (-13.9%). This marks the sixth consecutive trading day of decline for gold, setting the longest losing streak since the end of 2024. The typical logic is that war pushes up safe-haven assets, but this time is different—a strengthening US dollar index (DXY +0.4%), rising US Treasury yields, and inflation expectations driven by oil price surges have dashed hopes of the Federal Reserve turning dovish. Capital has been withdrawn from precious metals and redirected toward US dollar cash. In early February, CME raised gold margin requirements from 6% to 8% and silver from 11% to 15%, continuing to squeeze out leveraged long positions. On the surface, it appears to be a gold and silver collapse, but fundamentally, when inflation and war occur simultaneously, the pricing power of safe-haven assets has shifted from fear to interest rates.