‘Gold is behaving like a risk asset in 2026’ but de-dollarization trend will drive further gains – HSBC

HSBC says gold is acting more like a risk asset in 2026 than a classic geopolitical hedge, with the metal down about 15% month-to-date in March even as Iran-related tensions flare. The bank points to a stronger U.S. dollar and hawkish repricing in rates as the main near-term headwinds, arguing the usual “war/uncertainty = higher gold” playbook has failed in this episode. HSBC’s James Steel said the traditional inverse link between gold and U.S. real yields has broken down since 2022, as the buyer base has shifted toward retail and leveraged players alongside persistent geopolitical risk and central bank demand. He said volatility is likely to remain the dominant feature of the 2026 precious metals tape, with Fed policy and dollar exposure still the key swing factors. Despite the near-term washout, HSBC remains constructive on the long run because of ongoing de-dollarization. Steel said central bank gold purchases since 2022 have run at roughly 2-3x the prior 10-year average, and he framed bullion as one way for reserve managers to reduce dollar dependence. The key near-term risk is further liquidation in a stress event if the market continues to behave like a risk asset rather than a safe haven; upside would likely need either a softer dollar, lower real rates, or renewed institutional buying to reassert itself.