Gold under pressure from geopolitics, but the underlying trend remains intact

The past few days have once again shown how quickly financial markets can shift when geopolitics takes over.

The escalation around Iran, combined with firm communication from the United States, triggered an immediate global repositioning of capital. Energy prices moved sharply higher, the dollar strengthened, and risk assets came under pressure.

What stood out is that gold, traditionally seen as a safe haven, still weakened in the short term.

 

Why gold declined while tensions increased

At first sight, this may seem contradictory. In periods of uncertainty, investors would normally expect gold to rise.

But reality is more nuanced. The sudden jump in oil toward 110 dollars per barrel pushed inflation expectations higher, lifted real interest rates and strengthened the dollar. And that combination tends to pressure gold in the short term.

On top of that, the market also saw profit-taking after the earlier rally, along with possible selling from countries facing higher energy costs, in an environment marked by nervous sentiment and thinner liquidity.

 

Why the April 1 and 2 move still matters

Despite the correction, one point remains important: gold moved sharply higher again at the start of April.

That rise was not random. It was driven by structural factors that are still present today. Central banks continue to be net buyers of gold, ETF inflows are supporting the market and macroeconomic uncertainty remains elevated.

The recent pullback therefore changes nothing about the broader trend. If anything, it mainly shows how sensitive the market currently is to geopolitical headlines, oil moves and interest-rate shifts.

 

France is sending a clear signal

One development that received less attention, but is at least as meaningful, comes from France.

The Banque de France replaced the last 129 tonnes of gold reserves still held in New York with newly standardized bars and brought them back to Paris. This means that France’s full gold reserve is now once again located on French soil.

Officially, this was described as a technical operation aimed at modernizing the reserves, standardizing them and improving their marketability. Even so, the symbolic meaning is difficult to ignore.

In a world where geopolitical tensions are rising and strategic autonomy is becoming more important again, a major European central bank has chosen to keep its last gold formerly stored in the United States back on European soil.

 

More than a technical operation

What makes this operation especially interesting is that older gold reserves that no longer fully matched current market standards were converted in New York into new internationally compliant bars, with the resulting reserve position delivered in Paris.

France therefore solved several issues at once. Its reserves are now easier to value, easier to trade and more readily deployable if needed.

The outcome is clear: more control, more flexibility and less dependence on foreign storage.

 

The historical line of De Gaulle and Rueff

For anyone following the history of the international monetary system, this decision also reflects a longer historical continuity.

As early as the 1960s, Charles de Gaulle and Jacques Rueff warned about the risks of a world in which one national currency also serves as the global reserve currency. Their criticism of the privileged role of the dollar was already clear at the time: sooner or later, such a system creates deep structural imbalances.

That imbalance benefited the United States for decades. A country that issues the world’s reserve currency can borrow more easily, finance deficits more cheaply and sustain structural imbalances longer than other economies.

But no monetary privilege lasts forever.

 

Why gold is becoming central again

The real question today is therefore not whether the dollar will suddenly lose its position overnight. That is not the most likely scenario. The real question is what the next phase of the international monetary system will look like.

We do not expect one new reserve currency to simply replace the dollar. A far more logical outcome is a world in which gold regains a larger role as a neutral reserve asset without counterparty risk.

If gold once again serves as a strategic balance asset between countries, the need to rely entirely on one dominant national currency becomes less absolute. That is exactly why central banks around the world are once again putting gold back at the center of their reserve thinking.

 

Belgium missed a historic opportunity

If we compare the Low Countries, the Netherlands holds around 612.5 tonnes of gold reserves, compared with about 227.4 tonnes for Belgium.

Belgium once held a far larger reserve. At one point, the country had around 1,300 tonnes of gold, but most of it was sold, and sold at historically low prices.

That remains a missed opportunity to this day.

 

Conclusion

The recent pressure on gold should mainly be seen as a short-term market reaction within a volatile geopolitical environment, not as a break in the longer-term trend.

The fundamentals remain in place. Central banks are still buying gold, geopolitical risks are rising and confidence in the current monetary system is under more pressure than before.

Those who only look at daily price action see noise. Those who look at the bigger picture see why gold is once again gaining strategic importance.