Gold is supposed to be the thing you buy when the world gets scary. Three consecutive days of price declines during an active military conflict between the US and Iran suggest the playbook might need updating.
Spot gold fell as much as 1.7%, sliding into a range between $4,380 and $4,516 per ounce as US Central Command carried out strikes on Iranian missile and drone facilities. The catalyst for the military action was the downing of a US Apache helicopter, which prompted what the Pentagon characterized as self-defense strikes on Iranian missile launch sites.
Why gold is falling when it should be rising
The counterintuitive sell-off comes down to one familiar villain: the US dollar. A strengthening greenback has been working against gold, making the dollar-denominated commodity more expensive for international buyers. When the dollar flexes, gold tends to buckle, even when bombs are falling.
Meanwhile, Brent crude oil prices climbed above $96 per barrel during the same period. That’s the more traditional response to Middle Eastern military action, since oil supply disruptions are a tangible, immediate concern when missiles are flying near production infrastructure.
