Gold’s shock plunge

Gold just logged an 11% weekly drop—the worst week for bullion in 43 years—during the active U.S.-Iran conflict, and silver, copper and aluminum also posted double-digit declines, signaling a synchronized commodity selloff linked to liquidity stress (youtube.com). Analysts in the briefing flag a breakdown in the Eurodollar credit system—Asian oil importers being denied dollar lines are reportedly liquidating reserves, which helps explain why safe havens dumped alongside industrial metals (youtube.com). Turkey’s central bank drew down roughly 58–60 tonnes of official gold in mid‑March — about $8 billion worth — using a mix of outright sales and gold‑for‑currency swaps over two weeks after the Iran war began, according to Bloomberg’s analysis of central‑bank data. (bloomberg.com) Exchange‑traded funds suffered record withdrawals: Bloomberg Intelligence estimates roughly $11 billion was pulled from about 100 commodity and precious‑metal ETFs in March, and the SPDR Gold Trust recorded a $2.91 billion single‑day outflow on March 4. (bloomberg.com) (financialcontent.com) World Gold Council and market trackers show ETF holdings fell sharply in late March — roughly 90 tonnes of ETF gold were removed over four weeks — compounding pressure from sovereign reserve operations and private selling. (bullionvault.com) (gold.org) Russia also accelerated official gold sales in Q1 2026, its highest pace since 2002, raising an estimated $2.4 billion and trimming reserve holdings as budget and sanction pressures mounted. (themoscowtimes.com) Industrial metals were hit alongside bullion: LME aluminium plunged more than 8% in a session (the biggest drop since 2018), while copper slid into its steepest weekly fall in almost a year, reflecting broad deleveraging across metals markets. (bloomberg.com) (bloomberg.com) Market strategists and institutional managers described the episode as liquidity‑driven deleveraging — a rotation into dollars and Treasuries as investors met margin calls — rather than a pure flight‑to‑safety buying spree, according to Sprott and Bloomberg coverage of flows and client commentary. (sprott.com) (bloomberg.com) The Federal Reserve’s dollar swap lines with major central banks (BoE, ECB, BoJ, SNB, BoC) remain the formal backstop for offshore dollar shortages, but analysts caution that countries and banks without ready access to those lines are vulnerable to funding squeezes during the current energy‑driven shock. (richmondfed.org) (cfr.org)