Reasons why gold prices did not rise but fell after the US-Iran conflict

After the attacks on Iran by the United States and Israel, the price of gold has continued to weaken. Previously, gold, which is viewed as a “safe asset,” would be purchased in the face of rising geopolitical risks. Some analysts believe that in addition to the headwinds of a strengthening dollar and rising interest rates, the rapid increase in volatility in the financial markets and investors selling gold to offset losses are also contributing factors to the weakness in prices.

As an international benchmark for gold, the New York futures (main contract) on March 11 was around $5,170 per ounce, down more than 1% compared to before the U.S.-Iran conflict. Although prices rose on March 2 after the outbreak of the conflict, they plummeted on March 3 and have not returned to pre-conflict levels since. The trend of gold is similar to that of the Dow Jones Industrial Average, and it has not served as a safe haven for funds in emergency situations.

In February 2022, when Russia invaded Ukraine, gold rose by 4% by the eighth business day after the invasion began.

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