Gold Fails Safe Haven Test as Prices Plunge Amid War and Uncertainty

Gold prices are falling sharply, with precious metal dumping 8% so far this week and behaving more like Bitcoin than a stable store of value in times of economic uncertainty.

The metal is now down 15% from its late January all-time high of $5,500 per ounce, slumping to a ten-week low of $4,550 on Wednesday, according to GoldPrice.

“Gold was supposed to hedge the Iran war – instead it traded like everything else: down,” wrote Bloomberg analysts on Tuesday.

Gold Little Correlated With Stocks

The big move is something that is expected in volatile crypto markets, not stable gold.

“It’s a harsh but necessary reminder that the metal is little correlated with stocks and can behave just like another risk asset when liquidity tightens.”

Bloomberg ETF analyst Eric Balchunas observed that gold was an “unreliable hedge.” Bitcoin is similar, but with more correlation with stocks, he said.

“Both unpredictable but valid asset classes, and shouldn’t be judged based on short time frames.”

Wrote today about how investors just got a big-time reminder that gold has *zero* correlation to stocks, not inversely correlated. Big difference. Good diversifier but unreliable hedge. Bitcoin is similar but w more correlation (0.45) w stocks. Both unpredictable but valid asset… pic.twitter.com/ZnTXECn9pZ

— Eric Balchunas (@EricBalchunas) March 24, 2026

Earlier this week, goldbug Peter Schiff said, “If you were bullish on gold before the war, you should be more bullish now.”

“The war means soaring US budget deficits, skyrocketing food and energy prices, recession, rising unemployment, collapsing stock, bond, and real estate prices, increased terrorism, and a financial crisis.”

However, it appears that investors don’t agree, judging by this week’s violent sell-off in the precious metal. CNBC reported on Tuesday that gold is in bear market territory as a stronger US dollar and elevated Treasury yields continue to dull the yellow metal’s allure.

Bitcoin ETFs Performing Well

In a separate post, Balchunas said that Bitcoin ETFs have now seen $2.5 billion inflows for the month and are “one good day away from completely digging out of their year-to-date flow hole.”

“Again, incredible fortitude in the face of 40% six month price drop and widespread media pile on.”

For context, when gold fell 40% in a short time frame about ten years ago, it saw a third of its investors bail, he added.

Spot Bitcoin prices are holding around $70,000 at the moment and remain in a sideways channel that began in early February. However, it does seem to be making higher highs and higher lows, which could be considered bullish.

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