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

After the United States and Israel attacked Iran, gold prices remained weak. Previously, gold—regarded as a “safe asset”—would be bought when geopolitical risk increased. Some analysts believe that, aside from headwinds from a stronger U.S. dollar and rising interest rates, the rapid increase in volatility in financial markets is also one of the reasons investors sell gold to make up for losses, leading to continued weakness in prices.

As for the New York futures contract (the front-month contract) for gold, March 11 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 the pre-conflict level. Gold’s performance was similar to that of the Dow Jones Industrial Average, and it did not become a haven for funds in an emergency situation.

When Russia attacked Ukraine in February 2022, gold rose by 4% on the 8th business day after the start of the invasion.

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

The Nikkei Inc. and the Financial Times merged in November 2015 to become part of the same media group. The alliance formed by Japan and the UK’s two newspaper companies—both launched in the 19th century—is moving forward under the banner of “high-quality, the strongest economic journalism,” advancing broad cooperation such as joint special features. This time, as part of that effort, the two newspapers have enabled article exchanges between their Chinese-language websites.