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Gold is considered a safe haven in times of crisis – but prices have been plummeting since the Iran war: a loss of 18 percent. What are the reasons?
Berlin – Gold and silver have a reputation for serving as a reliable investment in uncertain times. However, since the outbreak of the Iran War, the prices of both precious metals have been falling continuously. On Monday afternoon, a troy ounce of gold was available for around 4,370 US dollars – a decrease of four percent compared to Friday evening. Gold exceeded the $5,000 mark for the first time in January.
Unlike in numerous previous crises, gold is not proving to be a safe haven in the Iran War. Since the start of US-Israeli military operations against Iran, the price of gold has lost more than 18 percent of its value. Silver is hit even harder. Since the start of the war, the metal has lost over 30 percent of its value.
The price of gold and silver is falling despite the Iran war – these are the reasons
One of the reasons for this is that the expectation of lower interest rates is increasingly fading. Market observers now expect that both the US Federal Reserve and the European Central Bank will raise key interest rates this year. This makes gold less attractive for investors because the precious metal – unlike government bonds – does not generate any interest income. In addition, the currently strong dollar is dampening demand for precious metals: Since gold and silver are quoted in dollars and the dollar, as a crisis currency, is currently comparatively valued, the metals are becoming more expensive for buyers outside the dollar area.
Ascan Iredi, who is responsible for capital market strategy at asset management company Plutos, told ntv: “The factors are essentially the rise in interest rates, because we can now expect interest rates to rise.” He cited investors’ need for liquidity as a further burden: many sold gold to free up capital for other investments. Iredi added: “Caution is simply necessary.” In principle, there is nothing wrong with precious metals as a long-term investment – the market simply needs time to stabilize. “It kind of stuck with it, caught up with it,” says Iredi.
John Reade, senior market strategist at the World Gold Council, comes to a similar conclusion. “Gold is likely to do well in a stagflationary environment – it always has – but there may be increased profit-taking and selling initially,” he told Reuters.
Gold continues to serve as protection against crises in the long term? That speaks for it
As Reuters reports, it was primarily the buying mood of central banks and institutional investors that drove the price of gold from $1,650 an ounce in November 2022 to a record high of $5,595 in January 2026. The brief price increase at the start of the war, which was quickly followed by losses, corresponds to a pattern that has already emerged in previous severe shocks. In such situations, the immediate need for liquid assets outweighs the search for safe investments, according to analysts at the Australia and New Zealand Banking Group.
John Meyer, analyst at the financial services provider “SP Angel”, is from Reuters quoted: “The overall picture remains unchanged: exploding budget deficits in the G7 countries, stubborn inflation and the diversification of central banks’ foreign reserves against the backdrop of ongoing deglobalization.” In the long term, gold is likely to retain its role as a hedge in times of crisis. (Sources: ntv/Reuters/dpa) (sir)
