Three wars. Three different outcomes for gold. And one clear lesson:

Gold doesn't rise because of war…
It rises because of the economic environment surrounding the war.

In 1979, during the Soviet invasion of Afghanistan, the world was already experiencing high inflation, oil shocks, and a weak dollar.
Real interest rates were deeply negative.
And when geopolitical tensions escalated, gold didn't just rise… it exploded upward from around $200 to $850 in just one year.

In 1990, during the Gulf War, gold initially rose as oil spiked and anxiety escalated.
But this rise didn't last.
Why?
Because the economic environment didn't change. Real rates remained positive, and the war ended quickly.
Gold lost momentum.

In 2022, with the Russian invasion of Ukraine, gold rose again toward $2,070.
But as central banks — led by the Federal Reserve — aggressively raised interest rates, real yields climbed.
The rally stopped.

Then a new factor emerged.

In 2024–2025, we witnessed unprecedented demand for gold from central banks.
Not temporary demand… but a structural shift.
Part of the world's transition toward a more multipolar system, away from single-currency dominance.

Yet even this factor isn't absolute.
In acute crises, central banks may need to prioritize liquidity, secure energy, and service dollar-denominated debt.

So, what actually drives gold?

Not war.
Not headlines.
But this cycle:

Shock → selling due to liquidity squeeze
Rising inflation → gold stabilizes
Falling real rates → strong gold surge

And here lies the importance of the current phase.

If current geopolitical tensions trigger commodity inflation, it will likely be treated as transitory inflation resulting from supply shocks rather than strong demand.

Why?
Because elevated debt levels don't allow for prolonged monetary tightening.

And this leads us to the likely shift:

From tightening → to easing
From positive real rates → to negative real rates

And this is the environment where gold historically thrives.

Today, gold may appear to be in a stabilization phase after a decline.

But beneath the surface?

It's more like a compressed spring.

And if real rates return to negative territory…
history suggests the surge could be swift.

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