Gold tumbled another 3.5% to $4,488 per ounce on Friday, marking an 11% fall for the week and the largest weekly loss the precious metal has seen since 1983 as geopolitical instability and uncertainty in the Middle East continue to weigh on the markets.
Gold has fallen more than 15% since Feb. 28, when the US and Israel first attacked Iran, erasing part of the rally that pushed its price up to the $5,500 mark in late January and casting doubt on its safe haven status.
TradingView confirmed that March 16-20 was gold’s worst-performing week since 1983. The 11% weekly fall was slightly larger than the last week of January, when gold shot up to about $5,320 before diving to $4,650, a drop that saw more than $2 trillion shaved off the precious metal’s market cap in days.
The war with Iran is also disrupting global oil flows, particularly in the Strait of Hormuz, causing fears of a prolonged energy crisis.
US President Donald Trump said on Friday that he is considering “winding down” its military efforts in the Middle East. However, the US has sent thousands of additional troops to the region as airstrikes continue.
At the same time, traders are anticipating that the US Federal Reserve will hold interest rates steady this year, making bonds and other yield-bearing investments more appealing than gold.
The Federal Reserve chair, Jerome Powell, also noted on Wednesday that higher energy prices would push up inflation, at least over the short term.
Bitcoin has clawed back lost ground on gold this month
Gold has outperformed Bitcoin (BTC) over the past 12 months, increasing 48.5% while the cryptocurrency has retraced 16.5% over the same timeframe.
Related: Bitcoin price aims to hold $70K amid rising inflation concerns
Bitcoin has responded better to the Iran conflict, however, up more than 11.6% to $70,535 since the US and Israel’s first attack on Iran.
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