Real yields vs. geopolitics: unpacking gold’s recent downtrend and the impact of US-Iran tensions. Technical levels to watch.
Chart of the week – Gold
Key takeaways
- Gold breaks down despite geopolitical risk: Gold has shifted from a top performer to one of the worst-performing assets (-12.6%) since late February, diverging from its typical safe-haven behaviour amid the US–Iran conflict.
- Rising real yields driving downside: A surge in 10-year US Treasury real yield above 2%—fuelled by stagflation risk and fading Fed rate cut expectations—has increased the opportunity cost of holding gold, pressuring prices lower.
Technical downtrend firmly in place: Gold has broken below the February low of $4,402, confirming a medium-term bearish trend, with next supports at $4,217, $4,085, and $3,934/3,886, while $4,775 resistance caps any recovery attempt.
The price action of gold (XAU/USD) has not been in sync with the characteristics of safe-haven demand over the past four weeks, despite an increase in the geopolitical risk premium stemming from the US-Iran war since 28 February 2026.
Gold flipped from a top performer to a worst performer
Fig. 1: Key cross-assets’ performances from 27 Feb 2026 to 20 Mar 2026 (Source: MacroMicro).
Fig. 2: Key cross-assets’ performances from 1 Jan 2026 to 27 Feb 2026 (Source: MacroMicro).
Gold (based on prices quoted from the London Bullion Market Association) is the second worst-performing cross asset with a loss of 12.6% from 27 February 2026 to 20 March 2026, and the worst-performing asset is silver (-19.6%) (see Fig. 1).
The current weak performance of the precious metals is a stark contrast to before the US-Iran war, where gold was a top performer that recorded a gain of 19.6% from 1 January 2026 to 27 February 2026 (see Fig. 2).
Longer-term US Treasury real yield triggered by stagflation risk was the key driver
Fig. 3: US 10-YR Treasury real yield medium-term trend as of 23 Mar 2026 (Source: TradingView).
The geopolitical risk premium arising from the US-Iran war has been coupled with a global oil supply shock scenario that sent oil prices rallying by 80% in just one month towards a 4-year high.
The current bout of oil supply shock has totally erased Fed rate cut bets to zero in 2026 based on the latest data from the CME FedWatch tool, in turn, triggering a rise in the 10-year US Treasury real yield.
Last Friday, 20 March 2026, the 10-year US Treasury real yield jumped by 12 basis points to 2%, breaking above its key medium-term range resistance of 1.98% that shows potential for a test on its next resistances at 2.09% and 2.20% (see Fig. 3).
Gold has a significant indirect correlation with longer-term US Treasury yields, as the precious yellow metal is a non-interest-bearing asset.
Hence, a higher 10-year US Treasury real yield will tend to imply a higher opportunity cost for owning and holding gold, in turn, lesser demand that may drive down prices of gold.
Let us now dissect the medium-term outlook (1 to 3 weeks) of gold (XAU/USD) from a technical analysis perspective.
Broke below February 2026’s low of $4,402
Fig. 4: Gold (XAU/USD) medium-term trend as of 23 Mar 2026 (Source: TradingView).
Gold has staged a bearish breakdown below its former key medium-term swing low of $4.402 printed on 2 February 2026.
In addition, the daily MACD trend indicator has continued to trend downwards below its centreline since 13 March 2026, which supports a potential medium-term downtrend phase for gold.
Watch the $4,736/4,775 key medium-term pivotal resistance to maintain the medium-term bearish bias on gold, with the next medium-term supports coming in at $4,217 and $4,085 (also the key 200-day moving average). A break below $4,085 exposes the next support at $3,934/3,886 (see Fig. 4).
However, a clearance and a daily close above $4,775 invalidates the bearish scenario for a potential mean reversion rebound towards the next resistances at $4,870 and $4,985 (also the 50-day moving average).
The information presented is historical information, and past performance is not indicative of future performance.
