Dissecting what really happened – and what didn’t – during gold’s Iran War selloff – World Gold Council

World Gold Council says March’s 12% gold selloff to US$4,608/oz was driven by deleveraging and liquidity stress rather than a deterioration in fundamentals. The WGC’s GRAM model flagged momentum factors as the main drag, including global ETF outflows, a COMEX managed-money long unwind and a trend reversal, with added pressure from a stronger dollar and higher yields. The flow data were heavy: global gold ETFs saw about US$12bn of outflows, equivalent to 84t, with the liquidation concentrated in North America (-87t) and Europe (-7t), partly offset by Asia inflows of US$1.9bn, or roughly 10t. COMEX managed-money net longs fell by US$2bn, or 19t, but the WGC says positioning still remains biased long. It also highlighted a 12% cumulative negative residual in its weekly model over the three weeks to 24 March, underscoring that the move was more violent than macro factors alone would justify. For the desk, the key takeaway is that gold’s March break looked more like a forced-flows event than a fundamental reset. The WGC said CTA selling likely amplified the downside once gold broke its 50/55-day moving average on 16 March for the first time in seven months, while broader cross-asset deleveraging and retail flush-out added to the move. Near term, the main risks are further deleveraging, central-bank selling/mobilisation, and any renewed real-yield spike; the constructive read is that Asia continues to buy dips and managed-money positioning is not yet fully washed out.