Why aren't gold prices rising, despite Iran war uncertainty?

"Since the United States and Israel first launched strikes on Iran on February 28, the conflict has escalated across the region, sparking concerns about the knock-on effect for the global economy. On March 2, Ebrahim Jabari, a senior adviser to the commander-in-chief of Iran's Islamic Revolutionary Guard Corps (IRGC), announced that the Strait of Hormuz through which 20 percent of the world's oil and gas is transported was closed; a move that sent oil prices soaring above $100 per barrel."

"This lack of movement is surprising, given that gold prices typically shoot up during economic crises as investors look for safe havens to shelter their cash. This is especially true during periods of global conflict. For example, when Russia launched its full-scale invasion of Ukraine, gold prices skyrocketed, Remi Bourgeot, economist at the French Institute for International and Strategic Affairs in Paris and author of analysis platform Epistelem, told Al Jazeera."

"Gold has remained broadly steady at around $5,000 an ounce in recent days. On Tuesday, spot gold was almost flat at $5,001.36 per ounce at 11:00 GMT. Spot gold is the price at which physical gold is bought and sold for immediate delivery. US gold futures for April delivery rose just 0.1 percent to $5,005.20."

Gold has maintained stability at approximately $5,000 per ounce during the 18-day Iran-Israel conflict, contrary to historical patterns where geopolitical crises typically drive safe-haven demand. The Strait of Hormuz closure by Iran on March 2 disrupted 20 percent of global oil and gas transport, pushing oil prices above $100 per barrel and causing stock market declines. However, gold prices have remained flat, with spot gold at $5,001.36 per ounce and April futures rising only 0.1 percent. This contrasts sharply with the 2022 Ukraine invasion, when gold prices surged as central banks, particularly China, engaged in historic buying to reduce US dollar dependence. Recent volatility and a strong dollar appear to have reduced gold's traditional safe-haven appeal.

Read at www.aljazeera.com