NEW YORK – The gold market is greeting geopolitical turmoil with a yawn.

The metal, which has dropped for three straight weeks, extended losses Wednesday as Treasury yields and crude oil jumped on the US plan to reinstate sanctions on Iran. The metal is trading at the cheapest relative to crude since late 2014.

While investors generally flock to bullion as a haven during times of global tension, heightened US-Iran strains have so far failed to trigger a surge in demand amid a stronger dollar, higher US interest rates and a solid world economy. Open interest in bullion remains close to the lowest this year, while speculators are holding the smallest bullish position since December.

“The safe-haven trade has just not been there,” Frank Cholly, senior market strategist at RJO Futures in Chicago, said in a telephone interview.

Gold futures for June delivery fell 0.1% to settle at $1 313/oz at 1:31 pm on the Comex in New York. The metal fell in the previous two sessions.

An ounce of gold buys about 18.5 barrels of oil, the lowest since December 2014. Crude rallied after President Donald Trump’s decision Tuesday to exit the Iran nuclear accord and reintroduce sanctions on the country, fuelling concern production could be cut.

REGIONAL INSTABILITY
“We would have expected gold to be in demand as a safe haven and to make noticeable gains, as Trump’s decision is likely to spark instability in the region and tensions between the US and the rest of the world,” analysts at Commerzbank said in a note to clients Wednesday. “Much now depends on how Iran and the European countries respond.’’

Crude oil for June delivery rose 3% to $71.16/bl on the New York Mercantile Exchange.

The decline in gold could start to draw in more gold buyers, according to Frank Cholly at RJO Futures.

“There’s relatively low-risk buying at these levels,” RJO’s Cholly said. “The market is facing a bottom here.”