Why Gold Prices Show Little Movement amid Iran versus US-Israel Conflict
Gold Prices Show Little Movement Amid Iran versus US-Israel Conflict
Jakarta, CNBC Indonesia – Global gold prices have failed to demonstrate significant gains despite escalating conflict between the United States and Israel against Iran over the past several weeks. Previously, the US-Israel attack on Tehran on 28 February killed Ayatollah Khamenei and prompted Iran to retaliate with missile strikes against American military bases in the Arabian Peninsula whilst closing the Strait of Hormuz.
Historically, precious metals typically strengthen during geopolitical tensions as investors regard them as “safe haven” assets, according to CNBC International. Following the US-Israeli attack on Iran on 28 February, gold prices initially rose from US$5,296 to US$5,423 per troy ounce, but this increase was short-lived.
A wave of selling pressure caused prices to fall more than 6 per cent to US$5,085 on 3 March. In recent days, gold prices have moved relatively stably within the range of US$5,050 to US$5,200 per troy ounce, with the latest price around US$5,175 per troy ounce.
Ross Norman, CEO of precious metals analysis website Metals Daily, stated that gold price stagnation is influenced by several factors, including US dollar strength and rising US government bond yields. He noted that oil price increases resulting from the conflict could prolong inflation and encourage central banks to maintain elevated interest rates.
This could occur if critical global energy corridors such as the Strait of Hormuz become disrupted by the conflict. High interest rates typically make investors more attracted to yield-bearing assets such as government bonds compared to precious metals that generate no interest.
“Gold and silver price movements currently appear lacklustre, but that may be natural following the sharp gains that occurred over the past few months,” Norman said, cited on Monday (16/3/2026).
He added that some institutional investors have begun exercising caution in holding gold, given the considerable price volatility in recent times.
Amer Halawi, head of research at investment firm Al Ramz, stated that geopolitical conflicts often trigger substantial selling initially. According to him, when liquidity pressures occur in markets, investors tend to sell various assets first before returning to purchase assets deemed safe.
“If a liquidity crisis occurs, nearly all assets will be sold until market participants can understand the situation and refocus investments on appropriate assets,” he said in the “Access Middle East” programme.
He added that this phenomenon frequently occurs at the outset of crises, representing a “traditional” occurrence.
“Traditionally, when market shocks happen, even gold can be sold first before subsequently recovering,” he said.
Although gold price movements appear flat in the short term, several global investment banks remain optimistic about the longer-term prospects of this precious metal. JPMorgan Chase predicts gold prices could reach US$6,300 per troy ounce by the end of 2026.
Meanwhile, Deutsche Bank maintains its price projection of US$6,000 per troy ounce by year-end in their latest research report. Analysts assess that ongoing global geopolitical uncertainty, persistent inflation, and Middle East tensions can continue supporting gold demand as a hedge asset over the longer term.