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Institutional banks highlight that precious metals, including gold, have come under pressure as stronger USD dynamics, fading expectations for rapid monetary easing, weak risk appetite, and forced deleveraging have temporarily overwhelmed their traditional safe-haven role. While prices have retreated despite elevated geopolitical tensions, several banks stress that underlying fundamentals for the complex remain intact, suggesting safe-haven demand could return once deleveraging flows subside and if tensions persist or broaden.

ABN Amro links broad precious-metals weakness to USD strength and deleveraging

ABN Amro observes that “precious metals slid as a stronger USD, fading rate-cut expectations, weak risk appetite, and deleveraging flows drained investor demand across the complex.” This view frames the current downturn as driven by macro-financial headwinds and forced position reductions rather than a structural deterioration in the asset class itself, implying that the recent weakness is closely tied to the prevailing USD environment and risk-off positioning.

"ABN Amro: Precious metals slid as a stronger USD, fading rate-cut expectations, weak risk appetite, and deleveraging flows drained investor demand across the complex."

OCBC sees temporary pressure but unchanged fundamentals for precious metals

OCBC attributes the recent loss of momentum in the complex to “concerns over a slower pace of monetary easing, a strong rebound in the USD, and sluggish risk appetite” that have “dimmed appetite for the precious metals complex.” However, OCBC emphasizes that “the underlying fundamentals have not materially shifted” and argues that “once the phase of forced deleveraging subsides, safe-haven flows are likely to re-emerge, particularly if tensions persist or broaden.” This suggests OCBC views current weakness as cyclical and expects safe-haven characteristics to reassert themselves under sustained geopolitical stress.

"OCBC: Concerns over a slower pace of monetary easing, a strong rebound in the USD, and sluggish risk appetite were some of the factors that dimmed appetite for the precious metals complex."

Rabobank highlights gold’s atypical underperformance amid rising geopolitical risk

Rabobank notes that “traditional safe havens, like gold, are not playing their usual part,” pointing out that the metal has “fallen 5% from its intraday peak at the start of this week” despite heightened Middle East tensions. By stressing this divergence between geopolitical risk and price action, Rabobank underscores that investors are currently favoring other forms of protection and liquidity over gold, marking a notable departure from gold’s typical crisis behavior.

"OCBC: However, the underlying fundamentals have not materially shifted."

The takeaway

Across the institutional commentary, banks agree that precious metals—and gold in particular—are under short-term pressure from a stronger USD, slower-than-expected monetary easing, weak risk appetite, and forced deleveraging, which have muted their usual safe-haven role. While Rabobank stresses gold’s unusual underperformance in the current crisis, OCBC and ABN Amro frame the move as flow- and macro-driven rather than fundamentally based, with OCBC explicitly suggesting that safe-haven demand for the complex could re-emerge once deleveraging abates and geopolitical tensions persist or intensify.