U.S. government bonds began losing their safe haven status long before the attack on Iran

Investors are no longer willing to accept a lower yield for U.S. Treasury bond protection.

Gold is the only go-to safe haven from global turmoil.

U.S. Treasurys are providing more evidence that they're no longer safe havens during times of crisis. Treasury bonds used to be places for investors to weather geopolitical upheaval. Whenever investors shifted to "risk off" from "risk on," out went stocks and other risky assets in favor of what was perceived as the world's safest asset: U.S. government bonds.

Recently, the opposite has been the case - more so after U.S. and Israeli forces attacked Iran on Feb. 28. As you can see from the chart below, the U.S. Treasury's 10-year yield BX:TMUBMUSD10Y hit a low early on March 1 (Eastern time).

On March 2, Middle East hostilities were escalating, more countries became involved and President Donald Trump announced that an extended U.S. campaign against Iran is possible. Treasury yields rose in response - just the opposite of how a safe-haven asset should behave. When bond yields rise, prices fall.

If this were a one-off event, we would want to avoid generalizing. But what we've seen in recent days has been the typical pattern. In the immediate wake of Israel's bombing of Iran last June, for example, the10-year Treasury yield rose significantly. Comparable government bonds of nine other developed countries rose by less.

Read: As global markets tanked over Iran, U.S. stocks were mostly unscathed. Here's why.

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