Gold seems to be the last safe-haven standing.

While one would expect U.S. Treasuries to get a boost from the geopolitical uncertainty inherent in a war, they have not. In fact, the 10-year Treasury yield has jumped from 3.96 percent the day before the U.S. and Israel launched their attack to 4.22 percent on the morning of March 12.

The 30-year yield has taken a similar trajectory, nudging up from 4.63 percent on Feb. 26 to 4.87 percent today.

This indicates tepid demand for U.S. debt.

Meanwhile, gold was the go-to safe-haven when news of the war hit the presses. The yellow metal surged above $5,400 an ounce before giving back most of those gains a few days into hostilities.

Why aren’t U.S. Treasuries catching a safe-haven bid?

I think there are two reasons. One is specific to the dynamics of this war, and the other is a more fundamental shift away from U.S. dollar assets.

Bonds and Oil

Forest for the Trees founder and respected macroeconomic analyst Luke Groman told Kitco News the problems in the Treasury market can be traced to the outsized role oil is playing in the conflict with Iran. He said the sudden oil shock exposes the limitations of a global financial system built on dollars.

The fact that the world’s oil market runs on dollars means every country in the world depends on the U.S. currency. Global investors hold around $27 trillion in dollar-denominated assets, including U.S. Treasuries. Groman said that with oil prices surging, foreign nations are stuck between a rock and a hard place.

“They have to have energy, they have to have food, they have to have these commodities. And so, they will sell dollar assets starting with treasuries because they’re the deepest and most liquid, to essentially buy oil.”

Who Wants to Lend More Money to Uncle Sam?

The war is playing out on a larger game board. Treasuries have been struggling for months because a lot of countries simply don’t want any more exposure to U.S. fiscal malfeasance. https://www.moneymetals.com/news/2026/02/19/no-the-national-debt-problem-isnt-getting-better-004701">The national debt has surged to $38.9 trillion.  Meanwhile, the federal government has shown zero interest in reining in spending. On top of that, it is blowing through an additional $1 billion per day to fight the war.

Would you want to lend your drunk uncle, who has maxed out all his credit cards, more money?

If not, you understand how the rest of the world feels about Uncle Sam.

So, it’s not surprising that many countries are anxious to minimize their exposure to the dollar. We see this reflected in https://www.moneymetals.com/news/2025/03/11/de-dollarization-gold-and-a-shift-to-a-multipolar-world-003898">accelerating de-dollarization and the fact that https://www.moneymetals.com/news/2026/01/08/gold-tops-treasuries-as-worlds-biggest-foreign-reserve-asset-004597">gold recently climbed above Treasuries as the world’s biggest foreign reserve asset. When times get tough, you don’t want rapidly devaluing dollars backed by a spend-happy U.S. government. You want real money – gold – backed by nobody.

Many countries are also concerned about the https://www.moneymetals.com/news/2024/02/29/could-weaponization-of-the-dollar-as-a-foreign-policy-billy-club-accelerate-de-dollarization-003013">weaponization of the U.S. currency. In https://www.atlanticcouncil.org/blogs/new-atlanticist/golds-geopolitical-comeback-how-physical-and-digital-gold-can-be-used-to-evade-us-sanctions/" target=”_blank” rel=”noopener”>an article published by the Atlantic Council, Kimberly Donovan and Maia Nikoladze point out that “central banks that are worried about getting sanctioned, want to protect themselves from a potential global financial crisis, or both have been stacking up gold at record levels.”

Make no mistake. This is a big problem for the U.S. because it depends on the global demand for dollars supported by its reserve status to underpin its massive government.

The only reason Uncle Sam can borrow, spend, and run massive budget deficits to the extent that it does is the dollar’s role as the world’s reserve currency. It creates a built-in global demand for dollars and dollar-denominated assets. This absorbs the Federal Reserve’s money creation and helps maintain dollar strength despite the Federal Reserve’s inflationary policies.

If the world needs fewer dollars, they will begin to return to the U.S., causing a dollar glut. This will increase inflationary pressure domestically as the value of the U.S. currency further depreciates. In the worst-case scenario, the dollar could collapse completely, leading to hyperinflation.

Groman pointed out a sobering reality.

“Iran doesn’t have to beat the U.S. military, if it even could, which I doubt. All it has to beat is the bond market.”