Gold Momentum Slows Even as Oil Volatility Intensify

(MENAFN) Gold prices have had difficulty continuing their upward movement despite rising geopolitical tensions and strong swings in oil markets. Analysts say many investors are currently favoring liquid assets and investments that offer higher yields while they wait for clearer guidance on the future direction of US monetary policy.

Although precious metals have remained close to record levels in recent weeks, the gains have been more limited than expected. This has occurred even as the conflict in the Middle East pushes oil prices significantly higher and increases worries about a potential rise in global inflation.

At the start of the Iran war, gold briefly climbed above $5,400 per ounce before falling back to around $5,100.

Energy markets have been marked by sharp fluctuations since the conflict involving Iran began. The global benchmark Brent crude at one point jumped to roughly $119.50 per barrel — its highest level since 2022 — before pulling back and later moving above $100 again as supply concerns continued.

At the beginning of the year, oil was trading near $60 per barrel, meaning prices have climbed by more than 50% during 2026. Market observers say the increase reflects growing concerns that any disruption in the Strait of Hormuz — a key route responsible for transporting about one-fifth of the world’s oil supply — could tighten global energy availability.

The surge in energy costs has also revived fears of another inflationary shock, which could make it more difficult for central banks to proceed with plans to reduce interest rates.

Despite these developments, gold has not witnessed the kind of dramatic rally that is often seen during major geopolitical crises. Analysts say this suggests investors are currently prioritizing stronger-yielding assets and the stability of the US dollar instead of moving heavily into traditional safe-haven metals.

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