Gold, Silver Crash Wipe $2T as Iran Tensions Trigger Market Shock

• Gold dropped to $4,320, while silver slipped below $65 amid heavy selling pressure.
• Forced liquidations and margin calls from leveraged funds accelerated the ongoing market decline.
• Rising oil prices boosted yields and dollars, reducing gold’s appeal versus interest-bearing assets.

Gold and silver suffered one of the sharpest selloffs in modern market history this week, erasing a combined $2 trillion in market cap.  The drop came despite rising geopolitical tensions, as higher bond yields, a stronger dollar, and forced liquidations pushed investors away from traditional safe-haven assets.

However, such an impact can be seen in the crypto market too, as Bitcoin price plunged to $68,129 aftering hiiting $76K earlier last week.

Forced Selling Accelerating the Drop

Today, gold prices dropped to $4,320 per ounce, falling 3.1% in a single session and sitting 18.5% below January’s all-time high of $5,589. Gold is now on track for its worst week since 2011 and its weakest month since October 2008.

Meanwhile, silver also fell, slipping below $65 with a 4% decline, wiping out around $150 billion in market value. 

Analysts suspect a large market participant is being liquidated. Gold spiked to $5,423 on Hormuz headlines, then reversed 6% in a single session, classic signs of forced selling, not panic. Leveraged funds that rode gold’s 66% rally in 2025 are facing margin calls, selling into weakness, and deepening the decline across seven consecutive losing sessions.

Rising Yields and Dollar Add Pressure

Iran’s closure of the Strait of Hormuz pushed oil above $112 a barrel, reigniting inflation fears. The Federal Reserve held rates at 3.5% to 3.75% on March 18 and cut its 2026 rate-cut projections from two to one. 

The 10-year Treasury yield jumped to 4.40%, rising 45 basis points in three weeks, while the Dollar Index moved toward 99.9.

When yields rise and the dollar strengthens, interest-bearing assets become more attractive than gold. This shift prompted institutional investors to rotate into Treasuries, increasing pressure on precious metals.

Not everyone agrees with the bearish outlook. Peter Schiff argued that selling gold due to delayed rate cuts may be misguided.

He noted that if inflation rises faster than yields, real interest rates decline—historically a supportive condition for gold. According to this view, the recent drop may be driven more by short-term positioning than long-term fundamentals.

Banks Still Bullish on Gold

Despite the selloff, major banks remain optimistic about gold’s outlook. However, JP Morgan targets $6,300 by year-end, while Deutsche Bank sees $6,000. UBS forecasts gold reaching $6,200.

Central bank demand also remains strong. China’s central bank has purchased gold for 16 consecutive months, while global central banks bought more than 1,000 tonnes in 2025 for the third straight year. Physical premiums in Asia are also running 5% to 10% above spot prices, signaling continued demand.