Gold prices drop despite ongoing Iran conflict
Gold just dropped below $5,000 an ounce, despite all the chaos from the ongoing Iran conflict.
The war has led to attacks and threats around the Strait of Hormuz, raising the risk of disruption to oil shipments, driving up energy prices and fueling inflation concerns (raising inflation expectations), and prompting many investors and institutions to reassess which assets they consider safe.
Gold usually shines when things get shaky
Gold usually shines when things get shaky, but after an initial jump to $5,423 in early March, prices slid 6% as a stronger dollar and profit-taking took over.
Silver also slipped by over 2%.
If the Strait stays closed for months, prolonged disruptions could drive gold gains of roughly 20-30% in some scenarios.
As long as tensions in Iran keep oil markets on edge
Even with all this back-and-forth, gold was trading near $4,970 intraday.
As long as tensions in Iran keep oil markets on edge, expect gold prices (and investor nerves) to stay pretty active.