Gold sinks deeper into bear market territory as sell-off extends
Gold bars weighing 1000 grams each are on display at the Austrian Gold and Silver Refinery (Oegussa) in Vienna, Austria, on February 3, 2026.
Georg Hochmuth | AFP | Getty Images
Gold continued its decline on Tuesday, deepening its bear market phase as investors unwinded positions, the strengthening of the US dollar and rising Treasury yields diminished the appeal of the yellow metal.
spot gold Prices fell 2% to trade at $4,335.97 per ounce before paring losses to 1%. Gold futures for April delivery were last down more than 1% at $4,358.80 per ounce. Spot silver fell more than 3% to $66.93 per ounce, while futures fell 2.61% to $67.54.
The dollar index, which measures the dollar’s strength against a range of currencies, rose 0.5 percent on Tuesday. A stronger dollar makes it more expensive for holders of other currencies, reducing the appeal of dollar-denominated bullion.
Spot gold has lost more than 22 percent since hitting a record high of $5,594.82 per ounce in late January; The precious metal lost nearly 10 percent last week, its worst performance since September 2011. Meanwhile, the dollar index has strengthened by around 3 percent since the beginning of the war.
Market observers attributed the decline to a mix of macro and positioning-based factors.
“Although gold initially gained value due to safe-haven demand, [Iran] “Due to the conflict, prices have pulled back recently,” said Rajat Bhattacharya, senior investment expert at Standard Chartered.
“We see this pattern repeated during periods of increased market stress as investors raise cash to pay margin calls or book profits where they can,” he told CNBC via email, adding that the recent strength of the dollar has also put pressure on gold demand.
Gold prices since the beginning of the year
Market participants are also reassessing expectations for US monetary policy; Sustained inflation keeps Treasury yields high, reducing the likelihood of aggressive interest rate cuts by the Fed.
High yields reduce the appeal of non-interest-bearing bullion. The yield on the 10-year Treasury rose nearly 5 basis points to 4.384% on Tuesday.
Some analysts said the sell-off was a natural correction after a prolonged rally fueled by geopolitical uncertainty and structural demand. Gold increased by over 64 percent last year.
“Gold’s recent rise to record highs has been fueled by a loss of confidence much broader than inflation: fiscal deficits, geopolitical fragmentation and central banks quietly moving away from dollar reserves,” said eToro market analyst Zavier Wong.
“After such a run, loosening of positions was inevitable. Gold has been one of the better-performing assets over the past year, and when markets get volatile, leveraged funds and institutional investors tend to reduce risk.”
