The current geopolitical tension began in early 2026 following military actions involving the United States and Israel against Iran, leading to regional instability and global economic uncertainty.

This conflict has affected:

• Oil supply chains
• Global trade routes (especially the Strait of Hormuz)
• Financial markets worldwide

At one point, disruptions in the Strait of Hormuz impacted nearly 20% of global oil supply, pushing energy prices sharply higher.

Why Gold Prices Usually Rise During War

Historically, gold is known as a safe-haven asset.

During uncertainty, investors move their money into gold because:

• It is not tied to governments
• It holds value during crises
• It protects against currency instability

At the beginning of the conflict, gold prices initially surged as expected due to fear and uncertainty.

Why Gold Prices Are Falling Despite the Conflict

This is where many investors get confused.

Even though war usually pushes gold prices up, recent data shows a decline in gold prices during the conflict.

Key reasons:

1. Strong U.S. Dollar

Gold is priced in USD.
When the dollar becomes stronger:
👉 Gold becomes more expensive globally
👉 Demand decreases

Recent reports show the dollar reaching high levels during the conflict, putting pressure on gold prices.

2. Rising Interest Rates

Gold does not generate income (no interest or dividends).

When interest rates stay high:
👉 Investors prefer bonds or savings
👉 Gold becomes less attractive

Inflation caused by rising oil prices is forcing central banks to keep rates higher for longer.

3. Inflation From Oil Prices

The conflict caused oil prices to surge dramatically.

Higher oil prices = higher inflation.

This creates a complex effect:

• Inflation supports gold long-term
• But high rates (to fight inflation) hurt gold short-term

4. Profit-Taking by Investors

Gold had already risen significantly before the conflict.

Many investors:
👉 Took profits
👉 Sold positions

This caused short-term price drops despite uncertainty.

Table: Why Gold Is Not Acting “Normally”

What This Means for Gold Investors

The current market shows that gold is no longer driven by one factor alone.

Instead, it is influenced by:

• Geopolitics
• Interest rates
• Currency strength
• Market psychology

Short-term:
👉 Gold may remain volatile

Long-term:
👉 Gold still remains a strategic asset for wealth protection

Many analysts expect gold prices to recover once:

• The conflict stabilizes
• Interest rates begin to decrease
• Central banks increase gold reserves again

How This Affects Investors in Vancouver and Canada

For investors in Vancouver and across Canada:

• Gold still acts as a hedge against uncertainty
• Currency fluctuations (CAD vs USD) also impact pricing
• Local demand for physical gold often increases during global instability

This is why many investors continue to:
👉 Buy physical gold
👉 Diversify their portfolio
👉 Focus on long-term protection instead of short-term price moves

If you’re trying to understand how global events like this affect your investments, you’re not alone.

At Peymani Gold, we help clients across Vancouver and British Columbia navigate gold buying with clarity, transparency, and long-term strategy.

If you’re considering investing in physical gold or want to understand your options, feel free to reach out or explore our latest pricing and products.

FAQ 

Does war always increase gold prices?

Not always. While gold often rises during conflict, factors like interest rates and currency strength can override this effect in the short term.

Why is gold falling during the Iran conflict?

Gold is falling mainly due to a strong U.S. dollar, high interest rates, and investors taking profits after earlier gains.

Is gold still a safe investment in 2026?

Yes. Gold remains a long-term hedge against inflation, currency risk, and geopolitical instability.

Will gold prices rise again after the conflict?

Many analysts expect a recovery once inflation stabilizes and interest rates begin to decrease.

Should I buy gold during geopolitical uncertainty?

It depends on your strategy, but many investors use gold as a long-term protection asset rather than a short-term trade.