When geopolitical shocks hit, investors typically rush to safe havens — and gold is usually first in line. The metal reached an all-time high on January 28, 2026, at $5,417.60 (€4,721.40) per ounce, yet when the Iran war began on February 28 prices did not keep climbing. One week into the conflict gold briefly traded near $5,327.42 before settling into a roughly $5,000–$5,200 range.
Analysts say the muted response is not surprising. Michael Hsueh, head of Metals Research at Deutsche Bank, warns that while crises often lift gold on average, each event affects markets differently. Deutsche Bank saw a comparable pattern after Israel’s attacks on Iran last year.
Two main forces have restrained gold, according to Commerzbank commodities analyst Carsten Fritsch. First, a stronger US dollar makes dollar-priced gold more expensive for holders of other currencies, cutting demand. Second, rising oil — and the higher inflation expectations it brings — reduce the chance of near-term Fed rate cuts. Higher or sticky interest rates make non-yielding assets like gold less attractive versus interest-bearing alternatives.
A further factor is that the late-2025 and January rally looked overheated. Wolfgang Wrzesniok-Roßbach, managing director of Fragold GmbH, describes the current sideways trading as a cooldown after an exaggerated move disconnected from fundamentals. That earlier rally already changed demand patterns: jewelry purchases dropped in Q4 to their weakest level in about 15 years, and central-bank buying was 230 tonnes for the quarter — the second-weakest fourth-quarter total in five years.
Investor behavior amplified the upside and the subsequent correction. Speculative buying, short-covering and fear of missing out helped drive the spike; the sharp downturn around January 30 revealed how overstretched the market had become, Fritsch says.
Silver has seen similar pressure, and views diverge on its prospects. Wrzesniok-Roßbach points to electrification and expanding solar capacity as structural supports that could keep silver much higher — possibly above $100 per ounce. By contrast, Frank Schallenberger of Landesbank Baden-Württemberg warns that slowing solar growth, a weak global economy, falling jewelry demand and continued outflows from silver ETCs could cool prices and even turn a current deficit into a surplus.
Looking ahead, analysts urge caution. Weak physical demand and central banks’ hesitancy to add reserves may mute rallies, while US policy actions remain a wild card that can provoke swift moves. Fritsch notes that a resolution of the conflict would likely weaken the dollar and oil prices, a development generally supportive for both gold and silver. Ultimately, outcomes will hinge on how oil-driven inflation evolves and how central banks respond.
Despite mixed signals, gold’s role as a safe-haven asset means it should remain an important portfolio hedge during uncertainty.
This article was originally published in German.