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The strengthening dollar and expectations of higher interest rates are diminishing gold's role as a "safe haven"
According to an analysis published by Al Jazeera and reported by journalists Sarah Shamim and Nils Adler on March 17, 2026, gold prices have remained stable even as the conflict between the US, Israel and Iran has escalated.
Traditionally, gold is considered a safe haven during times of geopolitical and economic uncertainty. However, unlike previous occasions, such as the Russian invasion of Ukraine, markets have not reacted with a sharp increase in its price.
The price of gold has stabilized around $5,000 an ounce, with minimal fluctuations in international markets. This comes as oil prices have risen sharply and stock markets have shown weakness.
Experts identify several key factors that explain this phenomenon. First, expectations that the US Federal Reserve may maintain or raise interest rates make the dollar more attractive to investors. Unlike gold, dollar-denominated assets provide returns through interest.
Second, gold itself has seen strong gains at the start of the year, limiting the potential for further gains in the short term. According to economist James Meadway, the market has already reflected a large part of the global risk.
Another factor is the strengthening of the US dollar. Since gold is traded in dollars, a stronger currency makes it more expensive for international investors, reducing demand.
Analysts also believe that the market's perception of the duration of the conflict plays a key role. There is currently an expectation that the war may not last long, which reduces the need for defensive investments in gold.
According to Rebecca Christie of Bruegel, the combination of a strong dollar and expectations of higher inflation is shifting interest towards other financial alternatives.
In conclusion, experts emphasize that a significant increase in the price of gold can only occur if two factors change: a softer monetary policy from the US and a prolonged worsening of the conflict in the Middle East.
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