Why is Gold Falling During a War?

[Olu Yemisi]

Why is Gold Falling During a War?

At first glance, it feels counterintuitive.
War usually = fear
Fear usually = people run to gold*

But this time, the market is reacting differently—and here’s why:

1. Oil Prices Are Rising → Inflation Is Rising
War is pushing oil prices up, and higher oil means higher inflation across economies.

2. No Rush for Interest Rate Cuts
With inflation staying high, central banks are less likely to cut rates anytime soon.
And that changes everything for gold.

3. Stronger Dollar = Pressure on Gold
As uncertainty rises, investors are piling into the U.S. dollar.
A stronger dollar makes gold more expensive globally, reducing demand.

4. Bonds Are Paying — Gold Isn’t
Right now, investors can earn solid yields from bonds.
Gold doesn’t offer any yield, so it becomes less attractive in comparison.

So What’s Really Happening?

Not all wars affect markets the same way.
• Some wars trigger fear shocks → Gold rises
• This one is triggering an inflation shock → Gold struggles

The Big Question:

So…
Are you sitting this out, or buying the dip?

 

[Mr.Simon]

Why is Gold Falling During a War?

At first glance, it feels counterintuitive.
War usually = fear
Fear usually = people run to gold*

But this time, the market is reacting differently—and here’s why:

1. Oil Prices Are Rising → Inflation Is Rising
War is pushing oil prices up, and higher oil means higher inflation across economies.

2. No Rush for Interest Rate Cuts
With inflation staying high, central banks are less likely to cut rates anytime soon.
And that changes everything for gold.

3. Stronger Dollar = Pressure on Gold
As uncertainty rises, investors are piling into the U.S. dollar.
A stronger dollar makes gold more expensive globally, reducing demand.

4. Bonds Are Paying — Gold Isn’t
Right now, investors can earn solid yields from bonds.
Gold doesn’t offer any yield, so it becomes less attractive in comparison.

So What’s Really Happening?

Not all wars affect markets the same way.
• Some wars trigger fear shocks → Gold rises
• This one is triggering an inflation shock → Gold struggles

The Big Question:

So…
Are you sitting this out, or buying the dip?View attachment 15450

This is one of those “not your usual war reaction” moments. Gold isn’t rallying because it’s not just fear driving the market; it’s inflation, rising oil, and a strong dollar making bonds more attractive. Right now, gold’s opportunity is more about timing than panic. it dips, you watch, you decide if it’s a real entry point or just a temporary wobble.