Gold is extending its sharpest sell-off in decades, driven by forced selling from overleveraged investors and rising government bond yields, even as a possible shift in the Iran conflict could quickly reverse the trend, according to a leading financial advisory executive.
Gold dropped more than 11% last week, posting its worst weekly performance since 1983, as the metal erased gains accumulated over the past two months. Futures settled at $4,574.90 per ounce on Friday, with the metal on track for its worst monthly performance since October 2008. The sell-off has been particularly striking given that gold gained 64% in 2025, its best annual performance since 1979, after hitting $5,000 per troy ounce for the first time in January 2026.
Nigel Green, Chief Executive Officer (CEO) of deVere Group, one of the world’s largest independent financial advisory organisations, says the sell-off is being amplified by the mechanics of leveraged markets rather than a fundamental breakdown in demand.
“Investors who built large positions using borrowed capital are now being forced to unwind as volatility spikes, and that accelerates downside momentum,” Green said. “Margin calls are pushing traders to liquidate gold positions to raise cash. Gold had been a standout performer, so it becomes an obvious source of liquidity when markets turn more turbulent.”
This phase, known as a classic liquidity flush, has seen investors scramble to sell profitable holdings to cover losses elsewhere or meet margin calls, pulling gold prices down even though the long-term case for owning the metal has not materially changed.
Rising yields are compounding the pressure. Surging energy prices from the Iran conflict have revived inflation fears, prompting central banks to rethink interest rate trajectories. Higher rates increase the opportunity cost of holding non-yielding assets like gold while making government bonds comparatively more attractive. The United States dollar index has risen nearly 2% since the Iran war began, making gold more expensive for international buyers and reducing demand from outside the United States.
Green argues the structural case for gold remains intact, pointing to central bank accumulation as a critical support factor. Global official sector purchases have exceeded 1,000 tonnes annually for several consecutive years, with institutions such as the People’s Bank of China (PBoC) leading a broader diversification away from dollar-denominated reserves.
Markets steadied somewhat on March 23 after United States President Donald Trump postponed military strikes on Iranian energy infrastructure for a five-day period following what he described as productive talks, though gold briefly traded higher before slipping again as Iran denied the discussions.
Green says any credible de-escalation would change the trajectory quickly. “This is a leverage-driven washout colliding with higher yields. Forced selling is overwhelming the market, but it’s temporary. We expect a shift in sentiment around Iran would unleash a rapid snapback, and gold would move higher with real force.”
Wall Street strategists broadly maintain bullish year-end targets, with J.P. Morgan projecting $6,300 per ounce and Deutsche Bank holding a $6,000 target, both set before the current escalation.
