Iran War Spurs Gold's Worst Price Drop Since 2013 Crash as ETFs Shrink, Central Banks Sell

Gold is being hit by a rare combination of heavy ETF liquidation and reported central-bank selling despite the Iran conflict, with bullion down 12.3% on the month to $4,578/oz and on track for its worst monthly drop since June 2013. The move has also left gold headed for its steepest one-month decline since the spring 2013 crash, even as the metal still posts a fifth straight quarterly gain, up 6.3% year-to-date. Flow data are the main driver: WGC-compiled figures show gold-backed ETF outflows of almost 90 tonnes over the four weeks to last Friday, the heaviest monthly liquidation since September 2022. Turkey’s central bank said it has mobilized 60 tonnes of reserves since the US-Israeli war on Iran began, and Natixis argues that if central banks turn net sellers while physical ETF demand stays weak, gold could remain under pressure through at least 1H26. The WGC/LBMA are simultaneously lobbying regulators to treat gold as HQLA, highlighting the metal’s liquidity and low volatility in stress periods. Silver is also weak: London silver was down 19.3% for March at $72.70/oz, its steepest monthly fall since September 2011. SLV has shed 4.4% by weight this month and is down more than 1,155 tonnes year-to-date, equal to nearly one-fifth of global silver mine output in Q1. GLD has fallen 5.0% this month to 1,046 tonnes, the smallest backing since late November, leaving ETF flow trends and any further central-bank reserve sales as the key near-term catalysts.