War, oil and gold: why precious metals behave differently than expected

In recent weeks, geopolitical tensions in the Middle East have escalated significantly, evolving into a global energy and economic issue.

This raises a key question: why is gold not rising more strongly despite this uncertainty?

The role of energy in financial markets

Markets are primarily reacting to energy prices, especially oil.

The Strait of Hormuz plays a crucial role, as approximately 20% of global oil supply passes through it.

• Rising oil prices
• Increasing inflation
• Cautious central bank policies
• A stronger US dollar

Why gold is temporarily under pressure

Gold remains a safe haven, but is currently influenced by:

• A strong US dollar
• Higher or prolonged interest rates
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Higher interest rates make cash and dollar-based assets more attractive, while gold does not generate yield.

Silver: more potential, more volatility

Silver is more sensitive to economic expectations due to its industrial use.

• Industrial demand component
• Economic sensitivity
• Strong physical demand from Asia

What does this mean for investors?

The current environment is shaped by:

• Energy-related tensions
• Inflationary pressure
• Geopolitical uncertainty

A key risk: the Strait of Hormuz

Further disruption could lead to:

• Sharp increases in oil prices
• Accelerating inflation
• Market volatility

Our view

• Current gold weakness is temporary
• Structural demand remains strong
• Central banks continue buying gold
• Geopolitical risks remain elevated

Why physical gold?

• Tangible asset
• Globally tradable
• Long-term store of value
• No counterparty risk

Conclusion

In the short term, gold is influenced by interest rates and currency strength. In the long term, it remains a key asset in uncertain environments.