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

After attacks on Iran by the United States and Israel, the price of gold has remained weak. Previously, gold—which had been viewed as a “safe-haven asset”—would be bought as geopolitical risks rose. Some analysts say that, in addition to headwinds from a stronger U.S. dollar and higher interest rates, one of the reasons for gold’s continued weakness is that volatility in financial markets has increased rapidly, prompting investors to sell gold to make up for losses.

On March 11, the New York futures contract (front-month contract) that serves as the global benchmark for gold was around $5,170 per ounce—down more than 1% from before the U.S.-Iran conflict. Although prices rose on March 2 after the conflict broke out, they plunged on March 3, and then never recovered to levels seen before the conflict. Gold has moved in a similar way to the Dow Jones Industrial Average and has not become a source of refuge for funds in an emergency.

When Russia launched its attack on Ukraine in February 2022, on the 8th business day after the attack began, gold was up 4%.

To continue reading, please click here to enter the Nikkei Chinese website

The Nikkei Business Publications, Inc. and the Financial Times merged into the same media group in November 2015. The alliance between two newspapers—both founded in the 19th century, one in Japan and one in the UK—is moving forward with collaboration across a wide range of areas, such as joint special features, under the banner of “high-quality, the strongest economic journalism.” This time, as part of that effort, the two newspapers have enabled article exchanges between their Chinese websites.