March Levels

Monday began with a heavy blow for the precious metals market. During Asian trading, spot gold plunged 1.3%, falling to $4,483.67 per ounce. This marks the lowest level since late March — a month and a half of gains and optimism erased in a single trading session. Futures performed even worse, dropping 1.7% and settling near $4,484. For those accustomed to viewing gold as an unshakable fortress during turbulent times, what is happening now feels almost like betrayal: the world is burning, yet the safe-haven asset is failing to provide safety.

But the gold market has never been a simple mechanism reacting solely to geopolitics. It has its own rules, its own internal logic — and right now, that logic is working against the metal with the same force that political crises usually work in its favor. To understand what is happening, one must step away from war headlines and look at the bond market — because that is where the main drama is unfolding, casting its shadow over precious metals prices.

The main killer of gold on Monday was the global rise in bond yields. Not in one country or one region, but almost everywhere simultaneously, as if an invisible conductor had waved a baton and forced the world’s bond markets to move in unison.

In the United States, yields on 10-year Treasury bonds climbed to a monthly high. This is the benchmark that guides nearly every other debt market in the world, and when it rises, the consequences ripple through the entire financial system. But an even more striking signal came from Japan. Yields on Japanese 10-year government bonds reached their highest level in 29 years on Monday. Nearly three decades — longer than the careers of many traders currently sitting at their...