Precious metals selloff reflects Iran liquidity crunch, and the gold outlook could improve ‘quite sharply’ once forced selling stops – Saxo Bank’s Hansen

Gold and silver are under heavy selling pressure amid liquidity crunch linked to the Iran conflict, with gold down over 19% and silver nearly 31% this month, reflecting forced liquidations and stop-loss selling rather than a fundamental shift in their strategic outlook. Saxo Bank's Ole Hansen highlights that gold's drop back to its 200-day moving average signifies the severity of the correction, driven by investors raising cash and a surge in U.S. Treasury yields overshadowing gold as a liquid asset. Silver, more sensitive to economic cycles, broke below key technical levels, facing potential further downside towards $60.80 and possibly $57.61 per ounce. Looking ahead, Hansen expects a sharp rebound in gold once forced selling ends, supported by rising fiscal debt, de-dollarization trends, and increasing stagflation risks due to higher energy costs. Silver could also recover but will remain more vulnerable to near-term economic growth concerns. At the time of writing, spot gold traded near $1,392.26/oz, down 0.32%, while silver was at $68.61/oz, down 0.74%, showing continued market volatility and positioning challenges in precious metals.