Why Gold Fell Despite Escalating Middle East Conflict

Gold has traditionally been regarded as a haven during periods of geopolitical risk. But rising oil prices have fueled inflation expectations, strengthening the dollar and U.S. Treasury yields and increasing the cost of holding non-yielding bullion. Traders also sell gold to meet margin calls when liquidity is tight, prompting the market to reassess the relative haven qualities of gold and bitcoin.

After the United States and Israel attacked Iran on February 28, gold surged from $5,200 to $5,400 an ounce before falling more than 6% in early March. Spot gold stood at $5,096 as of March 13. Metals Daily CEO Ross Norman said margin requirements had intensified the selling, while JPMorgan still forecast that gold could reach $6,300 by the end of 2026.