Market Upheaval Turning Safe Havens Sour

The market upheaval of the past few days has turned even traditional safe havens—such as long-term Treasury bonds and gold—into losing bets.

Gold prices dropped back below $3,000 an ounce and have tumbled more than 5% in the past week.

Long-term Treasuries saw their biggest drop in nearly two years, even as stocks steadied this week. Gold is also back well below its recent peak, Andrew Bary and Paul R. La Monica reported for Barron’s Daily.

The iShares 20+ Year Treasury Bond exchange-traded fund fell 3%, marking its biggest percentage drop since May 1, 2023. A steadying stock market may have prompted bond investors to take profits after recent gains.

Treasury bonds have lately moved inversely with stocks, and 30-year Treasuries fell by 4%.

There isn’t a single precipitating factor for the bond market losses on Monday, but long-dated Treasuries had rallied significantly in the prior two weeks. Concerns about a potential recession boosted prices, and the broad tariffs unveiled last week added to the fear.

Haven assets tend to rise in price when uncertainty grows. Gold prices dropped back below $3,000 an ounce and have tumbled more than 5% in the past week, after reaching a new all-time high just under $3,200.

Despite that, gold remains up about 13% this year, driven by heavy central bank buying, a weaker dollar, and renewed retail investor interest.

Inflation could increase if Trump’s tariffs are implemented, which would be negative for bonds as it reduces the real value of interest payments.

Another possibility is that overseas investors are repatriating funds and selling Treasuries. Bond analysts at J.P. Morgan said the selloff reflected “concerns over rising deficits and weakened foreign demand.”