A Few Reasons Why Gold ETFs Failed to Surge Amid Iran War

Mon, 16 March 2026 at 8:00 pm SGT 

Gold is a widely known safe-haven asset and tends to benefit during geopolitical turmoil, but the metal has remained largely range-bound amid the latest Middle East conflict involving Iran, the United States and Israel.

Gold bullion ETF SPDR Gold Trust GLD lost 1.5% last week (as of Mar. 13, 2026)a decline even steeper than that of SPDR S&P 500 ETF Trust SPY (which fell about 0.6% during the same time frame). Meanwhile, VanEck Gold Miners ETF GDX lost 5.3% last week. Let’s find out why gold bullion and mining ETFs are out of favor amid the current conflict.

Strong Dollar: A Negative for Gold

Note that the U.S. dollar has been gaining amid the current geopolitical tension. Invesco DB US Dollar Index Bullish Fund UUP added 1.3% last week and has jumped about 3.6% over the past one month (as of Mar. 13, 2026).

Although the U.S. currency underperformed in recent months and is even down 1.4% over the past one-year period, the latest rally in the safe-haven currency – the greenback – went against the gold rally. Gold is priced in U.S. dollars, and hence any uptick in that currency acts against the yellow metal.

Uptick in U.S. Treasury Yields

The benchmark U.S. Treasury yield started the month at 4.05% and hit 4.28% on Mar. 13, 2026. Rising Treasury yields are limiting gold’s upside. Higher yields tend to boost the appeal of interest-bearing assets like government bonds, reducing demand for non-yielding assets such as gold.

At the same time, surging oil prices amid the Iran war have heightened concerns about persistent inflation, which could push central banks to keep interest rates elevated.

Overvaluation Concerns?

Gold has experienced a significant rise in recent months, with GLD gaining about 66% over the past year. It is no surprise that some investors are cautious about increasing exposure to bullion, citing overvaluation concerns.

Need for Cash?

During periods of market stress, investors sometimes sell even traditional safe-haven assets to raise cash. After all, at times of heightened uncertainty, cash often behaves like king. Such liquidity-driven selling may temporarily pressure gold prices before the metal regains momentum.

Oil Rally: A Negative Gold Miners

Gold mining is heavily dependent on fuel, with 15–20% of all-in operating costs (per goldmoney.com) directly tied to energy (diesel for heavy equipment, electricity). The same source also highlights that beyond the diesel and electricity required to extract and process the metal, energy is needed to ventilate and cool underground mines as well. So, a sharp oil rally, like the one currently underway, is a key negative for miners’ profitability.

Source: Zacks, via Yahoo Finance

https://sg.finance.yahoo.com/news/few-reasons-why-gold-etfs-120000940.html