Gold’s steep pullback of late looks like a warning sign, but the broader picture hasn’t changed much.

In fact, according to Saxo Bank’s head of commodity strategy, Ole Hansen, a massive long-term tailwind is hiding in plain sight, linked to the ballooning U.S. national debt.

Of late, we’ve seen the shiny yellow metal under pressure from rising Treasury yields, which are impacting rate-cut expectations. 

That ongoing pressure intensified after the Fed left rates unchanged on March 18, 2026, reinforcing the higher-for-longer rate-market view. 

Consequently, as per The Wall Street Journal, gold logged its largest one-week dollar decline since 1975. As per Reuters reporting, spot gold traded at $4,860.21 on March 18, 2026, and has now slid to $4,406.78 at the time of writing, dropping nearly 9.3% in less than a week.

On top of that, the growing tensions with Iran sent energy markets into a frenzy, fueling fresh inflationary concerns, further weighing down gold’s ascent.

Speaking of the U.S. debt pile, it’s now at a mind-boggling $39 trillion, as per the Treasury’s latest “Debt to the Penny” data.

Additionally, it now costs roughly $520 billion to maintain that lofty debt load, which is equal to nearly 17% of federal spending so far this year. 

As we look ahead, the Congressional Budget Office forecasts a whopping $1.9 trillion federal deficit for fiscal 2026, with public debt skyrocketing to nearly 101% of GDP this year

Consequently, Hansen feels the long-term setup still favors gold. 

U.S. deficits continue to widen from critical levels, and debt sustainability risks are at record highs, compelling investors to turn to gold after the recent bout of profit-taking.

A sharp move in gold is raising questions about what comes next for prices

Photo by FRAME STUDIO on Getty Images

Gold and Silver Returns by Time Period

  • Today: Gold -231.18 (-5.06%) vs. Silver -4.34 (-6.24%).
  • 30 days: Gold -633.91 (-12.18%) vs. Silver -17.31 (-19.94%).
  • 6 months: Gold +837.30 (+22.4%) vs. Silver +25.56 (+58.17%).
  • 1 year: Gold +1,563.06 (+51.95%) vs. Silver +36.53 (+110.85%).
  • 5 years: Gold +2,845.06 (+164.74%) vs. Silver +44.44 (+177.40%).
  • 20 years: Gold +4,015.97 (+722.21%) vs. Silver +58.78 (+548.52%).
    Source: Goldprice.org 

Who is Ole Hansen?

For context, Hansen isn’t your run-of-the-mill precious metals analyst.

Related: Silver price today: This warning is bigger than most think

He joined Saxo Bank in 2008 and became head of commodity strategy a couple of years later, having spent 20 years in London markets before joining the firm. 

He has established his position as a veteran commodities watcher, known for covering gold, oil, and macro trends, and making prescient calls that media outlets frequently cite

Also, it’s worth noting that Saxo is a regulated Danish bank with over 1.5 million clients and handles over EUR 115 billion in client assets globally.

Why is gold falling anyway?

Gold should be a much stronger safe-haven trade at this point, but instead we’re seeing markets treat it as more of an inflation-and-rates story first, putting near-term pressure on bullion. 

That said, here are three of the main factors behind gold’s decline.

  • The Iran war is lifting energy prices: Reuters reported that Brent traded at $111.90 (up 55% for the month) and U.S. crude at $98.35 on March 23, stoking inflationary fears.
  • Inflation remains sticky: Speaking about inflation, the Fed’s preferred PCE gauge jumped 2.8% year-over-year in January, while core PCE and monthly core PCE rose  3.1% and 0.4%, respectively. Also, February PPI came in hot at 0.7% month-over-month and 3.4% year-over-year.
  • Higher inflation usually means higher-for-longer rates: As per Reuters, U.S. Treasury yields jumped to eight-month highs, while the dollar index shot up to 99.53, with markets pricing in fewer Fed cuts. That hurts non-yielding gold as the dollar starts to win the safe-haven trade.

What’s the link between U.S. debt and gold prices?

The relationship between the shiny yellow metal and U.S. finances essentially boils down to trust and stability. 

Put simply, a fiscal deficit is the amount the government overspends in a particular year, while the national debt is the total of those deficits over time.

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Taking the analogy of a credit card, a deficit is what we add to the bill each year, while the debt is the total balance owed.

So when deficits remain elevated, debt continues to rise, which makes investors very uneasy about long-term economic stability. 

That’s exactly where gold comes in.

Gold is often deemed a safe-haven metal, and once we see confidence break down in the U.S. government’s finances, investors tend to shift their assets away from a country’s balance sheet. 

Hence, when debt levels climb and deficits widen, demand for gold tends to rise, supporting prices over the long term.

Top Gold ETF Returns vs. the S&P 500

  • Year to date: SPDR Gold Shares (GLD) +4.31% vs. SPDR S&P 500 ETF Trust (SPY) -4.63%.
  • 2025: GLD +63.68% vs. SPY +17.72%.
  • 2024: GLD +26.66% vs. SPY +24.89%.
  • 2023: GLD +12.69% vs. SPY +26.18%.
  • 2022: GLD -0.77% vs. SPY -18.18%.
  • 2021: GLD -4.15% vs. SPY +28.73%.
  • 2020: GLD +24.81% vs. SPY +18.33%.
    Source: Total Real Returns (data for GLD and SPY, with dividends reinvested; YTD figures are through March 20, 2026). 

Why Hansen sees gold’s long-term case still intact

Hansen argues that investors should block out short-term noise and focus on the bigger forces driving gold. 

Related: Elon Musk’s Terafab bet: what it means for Tesla investors

Rising yields and shifting rate expectations have weighed down gold in recent weeks.

However, he argues that these are temporary headwinds linked with inflation shocks and central bank uncertainty. Perhaps the deeper story is the U.S. fiscal picture, which continues to worsen as the Iran war drags on.

Hansen argues that this worrying macro picture then compels investors to seek protection against the massive “debt sustainability risks” as we continue to see deterioration in the U.S.’s balance sheet.

The macroeconomic backdrop has become even more complex.

Sluggish growth, persistent inflation, and ballooning government debt are beginning to resemble a stagflationary setup. That setup usually favors gold historically.

Hence, despite the market’s fixation on yields and rate cuts, Hansen believes gold’s real driver hasn’t been priced in yet. 

Wall Street’s gold targets for 2026

Wall Street remains broadly bullish on gold heading into the year-end.

The latest targets on the king metal sit well above the $4,406.78spot price at the time of writing, with multiple firms still pointing to $6,000 or more for the year.

  • JP Morgan: $6,300, implying about 43.0% upside versus $4,406.78.
  • UBS: $6,200, implying about 40.7% upside versus $4,406.78.
  • Wells Fargo: $6,100-$6,300, implying about 38.4%-43% upside versus $4,406.78.
  • Deutsche Bank: $6,000, implying about 36.2% upside versus $4,406.78.
  • Goldman Sachs: $5,400, implying about 22.5% upside versus $4,406.78.
  • BNP Paribas: $5,620 average for 2026, implying about 27.5% upside versus $4,406.78.
    Sources: Reuters, Investing.

Investor takeaway on gold

Clearly, Gold needs some things to go for it before it can move higher.

First up, Treasury yields need to ease, as that makes non-yielding assets such as gold less attractive. 

Moreover, buyers need to push the shiny metal back over recent trend levels, especially its 21-day average near $5,080 and the 50-day average around $4,980. 

Once those critical levels are achieved, the recent selloff is losing control.

On top of that, the current technical picture is still pointing to a ton of weakness. The RSI is at 35.66, which underscores heavy selling pressure, though it’s not at an extreme washout level.

On the downside, the next critical levels may be the 100-day average near $4,555 and the 200-day average near $4,042. If gold drops through $4,555, that points to the correction deepening and potentially opening the door to $4,042.

Of course, billionaire Ray Dalio’s case for gold being portfolio insurance still matters. 

Reuters reported him saying that,

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