Reasons Why Gold Prices Fell Instead of Rising After the US-Iran Conflict

After attacks on Iran in the United States and Israel, gold prices remain weak. Previously considered a “safe asset,” gold tends to be bought during rising geopolitical risks. Some analysts believe that, in addition to the headwinds of a rising dollar and increasing interest rates, the rapid increase in financial market volatility and investors selling gold to offset losses are also reasons for the weak prices.

As the international benchmark for gold, New York futures (main contract) on March 11 was around $5,170 per ounce, down more than 1% compared to before the US-Iran conflict. Although prices rose after the conflict broke out on March 2, they plummeted on March 3 and have not recovered to pre-conflict levels since. Gold’s price movement is similar to the Dow Jones Industrial Average and has not become a safe haven during the emergency.

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