One would expect to see the yellow metal climb mechanically: a war in the heart of the Middle East, an energy spike, uncertainty... the entire "safe haven" narrative seemed in place. However, in just a few weeks, the script has flipped.
On March 1, in the aftermath of the first strikes carried out by the US and Israel against Iran, gold was still trading around $5,300 per ounce (31.10g of gold) — before nervousness changed sides. The yellow metal shed 5.3% within 48 hours of the first bombings in Iran. At the same time, silver slid 13%, dropping from $93 per ounce to $83. The same dynamic applied to platinum, which fell 12.7% in the wake of the events. This tremor turned into a structural trend. Three weeks later, on March 25, gold fell toward $4,500 (-14%), silver is hovering around $73 (-22%), and platinum is around $1,970 (-17%).
This paradox — a war, yet a falling safe haven — is not a statistical accident, but rather a financial mechanism: geopolitics does not decide the flight to safety alone; it can translate into inflation, interest rates, the dollar, and liquidity constraints.
The conflict in Iran did not just trigger a "fear premium": above all, it revived an energy shock, with the Strait of Hormuz at the center of the shockwave. As a vital artery for global oil and gas, hydrocarbon flows there came to a dead stop, even if the first signs of improvement are appearing this Wednesday.
For gold, however, energy acts as a double agent:
The first is the intuitive idea: more expensive oil = higher inflation = gold should rise, because many investors see gold as a hedge against rising prices.
But the second effect can be stronger in the short term: if inflation picks up because of energy, central banks like the Fed or the ECB become less inclined to cut rates, or even suggest they could stay hawkish for longer. And when rates remain high, gold becomes less attractive because it yields no interest. In parallel, high rates often support the dollar, which also weighs on gold.
This is precisely what played out when the accelerating energy crisis began to contaminate monetary policy expectations. Initial Purchasing Managers' Index (PMI) surveys showed a slowdown and, simultaneously, a rise in cost expectations: Europe bordered on stagnation, and S&P Global even mentioned stagflationary signals.
Faced with this mix — imported inflation and weakened growth — the natural temptation for central banks is to "protect anti-inflation credibility." The Federal Reserve (Fed) maintained its benchmark rate in a 3.50%-3.75% range, while projecting higher inflation and signaling that further easing would depend on more convincing disinflation. In the eurozone, the European Central Bank (ECB) kept its rate at 2% while warning that the war "will have a material impact" on inflation via energy.
Mechanically, this sends gold back to its structural vulnerability: the opportunity cost of holding gold increases (compared to interest-bearing cash or bonds). March was a living illustration of this principle: as energy fueled inflationary fears, markets stopped expecting rapid rate cuts — and gold paid the price.
When the dollar and cash replace the "safe haven"
On March 1, even as gold was still holding its high levels, the dollar index was already advancing (making gold more expensive for non-dollar buyers and potentially dampening marginal demand). The following days saw the same dynamic: geopolitical tensions supported gold in theory, but rising yields and dollar strength were enough to push the yellow metal back.
A revealing chart: the evolution of the dollar index (USD vs. a broad basket of currencies) relative to gold. We observe an almost perfect negative correlation: the dollar falls, gold rises; the dollar rises, gold falls.
MacroTrends
More broadly, gold has not "ceased to be a safe haven"; it has been temporarily displaced by a dollar that has once again become, in the emergency, the most liquid funding currency and safety valve. The most telling sign of this preference for liquidity came from flows: inflows into US money market funds reached a record of around USD 7.86 trillion, rising since the start of the war.
The war produced two contradictory forces: (1) "geopolitical" fear, which should support gold, and (2) "inflation/rates/dollar" fear, which can drive it down. With the conflict in Iran, the latter dominated the former.
Another parallel reason: gold, like silver and platinum, was not starting from zero. It was coming off a cycle of euphoria: a massive rally over the last three years, with an acceleration in 2025.
A market that has already risen significantly becomes a "rich" market, and therefore vulnerable: sometimes all it takes is a shock that shifts rates and the dollar to transform "safe haven buying" into "profit-taking," which translates in trading rooms into terms like: "long liquidation, de-risking, overcrowded trade..."
In other words: gold, being highly liquid, became a source of funding. This is a recurring motif in episodes of stress: when margins tighten and portfolios must reduce risk, you sell what is easy to sell.
This mechanism was amplified by the structure of gold's jump last year. Part of the rise had been fueled by "FOMO — Fear Of Missing Out" behavior, rather than simple fundamental logic. The reversal, therefore, becomes a social phenomenon as much as a financial one: euphoria turns into a rush for the exit.
(A small aside: counter to this FOMO logic, there is "JOMO — Joy Of Missing Out" — which consists of accepting not being part of every move, and even rejoicing in it. Something to meditate on as an investor.)
Why silver and platinum also decoupled
First, gold is the locomotive of precious metals. Its movement often dictates the behavior of other metals. But as for silver and platinum, in addition to being "precious metals," they are also cyclical because a large part of their demand is linked to industry.
The Silver Institute highlights that industrial demand for silver reached record levels in recent months, driven notably by electronics, photovoltaics, and applications related to the energy transition — making silver very sensitive to growth expectations and production cycles.
Yet, precisely, the March PMI surveys gave signals of a global slowdown under the effect of the energy shock, with rising cost expectations and weakening activity. In such a context, silver often behaves like "high-beta gold": it amplifies the upside when the cycle is supportive, but it also accentuates the downside when the market fears a contraction.
Platinum is even more clearly plugged into the real economy. According to the World Platinum Investment Council, platinum demand is structured around segments like automotive (the largest component), industry, jewelry, and investment — with the automotive share often ranging between 36% and 44% in recent years.
When war drives up energy, threatens margins, extends lead times, and raises the risk of "stagflation," the market tends to anticipate trade-offs: a slowdown in industrial volumes, caution on production, and, on the investor side, a reduction in more cyclical exposures.
