The war in Iran has triggered sharp swings across global commodity markets, but one of the biggest surprises has been the opposite paths taken by oil and gold, two assets traditionally viewed as protection against inflation and geopolitical turmoil.
Since the conflict began in late February, Brent crude prices have climbed roughly 37 percent, while gold prices have dropped around 10 percent. The shift has challenged long-held assumptions among investors who typically turn to both commodities during periods of instability.
Oil prices have risen sharply as fighting disrupted production and shipping routes in the Persian Gulf, a region critical to global energy supplies. Analysts at Goldman Sachs estimate that about 14.5 million barrels of crude production per day have been taken offline because of the conflict, contributing to one of the largest global inventory drawdowns on record.
Before the war, Brent crude traded near $70 a barrel. Prices later surged above $120 during the height of market panic before settling around the $100 mark as traders weighed the prospects of supply recovery and the reopening of key shipping lanes.
The impact on gold has been far less predictable.
Gold is often regarded as a classic safe-haven asset during wars, economic uncertainty and inflationary periods. Central banks around the world had been buying large quantities of the precious metal in recent years, helping push prices significantly higher through 2025.
Yet instead of extending those gains after the outbreak of war, gold has fallen sharply.
Market analysts say the main factor behind the decline is not geopolitics but interest rates.
Unlike bonds or savings products, gold does not generate income. It pays no interest or dividends, meaning its appeal weakens when investors can earn higher returns elsewhere. Rising real interest rates in the United States have increased the attractiveness of Treasury bonds and other interest-bearing assets, drawing money away from gold.
That dynamic has outweighed traditional fears linked to war and inflation.
Investors are also watching central bank policy closely. Concerns that higher oil prices could push inflation upward have strengthened expectations that the US Federal Reserve may keep interest rates elevated for longer than previously expected.
Higher borrowing costs typically place pressure on gold prices because they increase the opportunity cost of holding non-yielding assets.
Oil, meanwhile, continues to react primarily to fears over supply shortages. Markets remain highly sensitive to developments around the Strait of Hormuz, a key shipping route through which a large share of the world’s crude oil and liquefied natural gas passes.
The divergence between oil and gold has highlighted how financial markets are being shaped not only by geopolitical risks, but also by expectations surrounding inflation, monetary policy and global economic growth.
