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

After attacks on Iran by the United States and Israel, gold prices have remained weak. Previously, gold—which was seen as a “safe-haven asset”—would be bought when geopolitical risks rose. Some analysts believe that this time, in addition to headwinds from a stronger U.S. dollar and rising interest rates, the rapid increase in volatility in financial markets is also one reason investors have been selling gold to make up for losses, contributing to the weakening of prices.

On March 11, the New York futures contract (the benchmark contract) for gold—used as an international benchmark—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 fell sharply on March 3 and have not recovered to pre-conflict levels since then. Gold has followed a similar trend to the Dow Jones Industrial Average and has not become a refuge for funds in an emergency.

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

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The Nikkei Inc. and the Financial Times merged into the same media group in November 2015. The alliance between two newspapers—founded in the 19th century, one in Japan and one in the UK—has been moving forward with a banner of “high-quality, the strongest economic journalism,” promoting broad collaboration in areas such as joint special features. This time, as part of that effort, article exchange has been enabled between the two newspapers’ Chinese-language websites.