Gold prices have lost nearly 11% since the Iran war began. Reasons to buy the metal are piling up again.

MW Gold prices have lost nearly 11% since the Iran war began. Reasons to buy the metal are piling up again.

By Myra P. Saefong

High oil prices are likely to contribute to slowing GDP growth, boosting gold's appeal

Gold futures have fallen since the Iran war began, but are still trading higher year to date.

The value of gold has declined by nearly 11% since the Iran war began in late February, but opportunity in the precious-metals market for investors isn't just about that decline in prices: The rally in oil is expected to help boost gold's appeal too.

"Higher-for-longer" energy prices will likely be a big growth headwind in the months ahead, and that macro setup in the second half of this year will be more favorable for gold, Michael Armbruster, co-founder and managing partner at futures brokerage Altavest, told MarketWatch. The yellow metal is often viewed as a safe-haven asset during periods of economic stress.

It also helps that gold prices have fallen from their peak. Since the start of the Iran war on Feb. 28, gold prices have remained below the record-high levels seen earlier this year. The most active, June contract for gold futures (GC00) (GCM26) settled at $4,693.70 an ounce on Comex Monday, down 1% for the session.

Prices have fallen about 10.6% from the Feb. 27 settlement of $5,247.90. Though gold prices rose during the first trading day after the start of the conflict, they eventually posted a nearly 11% loss for the month of March. That was the first monthly decline since June of last year, and the biggest monthly drop in nearly 13 years, according to Dow Jones Market Data.

"What we've seen since the outbreak of war is a fairly typical pattern in crisis markets," said Stefan Gleason, president and CEO at Money Metals Exchange. Gold initially surged on geopolitical fear and safe-haven demand, but the price pulled back as "liquidity needs emerged" and as the narrative shifted to inflation worries and a halt to the Federal Reserve's interest-rate-easing cycle.

Prices based on the most active gold contract are now trading 12.4% below the record intraday high of $5,626.80 from Jan. 29.

Gold has been "lumped into every other asset market," and is therefore being driven by the U.S.-Iran conflict, said Brien Lundin, editor of Gold Newsletter.

Whenever the prospects for peace look bad there, the resulting spike in oil prices spurs concerns over tighter Federal Reserve policy, which sends markets tumbling, Lundin said. The S&P 500 SPX, for example, lost 5.1% in March; gold tumbled along with the stock market, sending silver (SI00) and mining stocks down as well, he noted. The S&P 500 Metals & Mining Industry Index XX:SP500.151040 fell around 13% in March.

Front-month contract prices for global benchmark Brent crude oil (BRNM26), meanwhile, have climbed about 49% since the start of the war. They touched a high of $119.50 so far this year on March 9, and settled at $108.23 on Monday.

Higher oil prices are likely to contribute to slowing GDP growth in the second quarter of this year, and that can lift gold's appeal for investors, said Altavest's Armbruster. Meanwhile, the U.S. is still running a "multitrillion-dollar deficit that is going to be financed by more money printing," furthering gold's appeal, he added.

Still, action in gold has been far from impressive. Prices for the metal are trading 8.1% higher year to date - but that's after climbing over 60% last year.

Volatility in gold is "part and parcel" of what happens when Western traders are involved in the metal, said Lundin. Western investors entered the gold market "in force" late last summer, he noted, "bringing furious rallies but also sharp corrections that were unseen when central-bank buying was the primary driver for gold."

Gold buying by central banks had been a key reason for its climb to record highs. The World Gold Council characterized central-bank buying of gold in 2025 as "resilient," but overall purchases for that year fell below the more than 1,000 metric tons that global central banks had purchased in each of the previous three years.

The latest data show that some central banks, such those of Turkey and Russia, sold gold in February, according to the World Gold Council.

Read: Some central banks have been selling their gold. That doesn't mean you should too.

Lundin said that "official demand for gold has transitioned to more of a support for the market as opposed to a driver." Overall, however, central banks are still buying - just "naturally a bit less, as the price has risen to such dizzying levels."

For now, gold and silver are "like race horses in the starting gate, waiting to gallop ahead," Lundin said. He believes the gold bull market will resume as soon as peace breaks out between the U.S. and Iran. That would likely help ease oil prices and, along with them, inflation worries and the prospect of higher interest rates.

-Myra P. Saefong

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April 27, 2026 16:09 ET (20:09 GMT)

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