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Whenever missiles and bullets start flying in the Middle East, all eyes are on the oil sector, and this may be a generational moment for that.
But quietly in the background, when markets opened in Asia Monday morning, there was another commodity squarely in investors minds: gold.
The yellow metal has been much in the news after a parabolic spike drove the price to $5,500 an ounce in January before a correction knocked it down $1,000. That was followed up by blockbuster Q4 earnings reports from major gold producers like Barrick Mining (B) and Newmont Mining (NEW) and a renewed vertical move that is at publishing time testing those parabolic highs from January.
Silver, which has followed a similar, yet characteristically-silver trajectory of even greater percentage gains and greater percentage tumbles, has also mounted an impressive comeback which some precious metal analysts thought may not be likely.
Yet even considering Asia’s historically higher demand for silver than the West, Monday’s trading was about finding a safe port in a storm, and that was gold. Gold closed Monday in Asia up 2.3% for a spot price of $5,419.50, beating silver, which was also consolidating on its recent move past $90, by 0.3%.
In New York, gold was trading at $5,390 at publishing time, a 0.6% higher move up than silver.
The decision by Israel and the United States to launch a surprise attack to assassinate the leader of Iran engulfed the Middle East into conflict, with casualties and missile strikes recorded in 11 countries as well as US embassies and military installations. Over 3,500 flights have cancelled, several oil tankers plying the Straits of Hormuz have been attacked, and Maersk, the world’s largest container shipping company, has suspended navigation there.
Oil was up 7.34% at publishing time, and it remains to be seen across the West whether equity markets are in for a steep selloff. Almost all 3 of the major US indices shed 1.0% off the back of a hotter-than-expected Producer Price Index report on Friday, with the core PPI that cuts out food and energy up more than 3%, suggesting that inflation still isn’t under control even as the market is widely pricing in another 2 cuts in the Federal Reserve’s interest rate.
Gold has been among the preferred safe haven assets in recent months, as volatility dating back to April’s “Liberation Day” tariff announcement in 2025 has aided in supporting gold’s rise to all-time-record highs along with consistent central bank purchases around the world. On Friday, the 10-year US Treasury had just knocked yields below 4% for the first time since November, but data from just 2 hours before publishing time showed this downward trajectory had dramatically reversed by 1.6%, likely a result of the rise in energy prices from the turmoil in the Gulf.
The US Government needs yields on Treasury notes to come down if it hopes to be able to finance another year of massive projected deficits. The recent reversal of the entire tariff regime by the Supreme Court means that a substantial revenue source that was expected to pay for the One Big Beautiful Bill Act has been removed. At the same time, the debasement of the US dollar is now becoming a real concern for foreign investors who’ve previously been quick to buy Treasury debt, and a yield below 4% represents something very close to negative.
Gold is now consistently showing itself to be the prime safe haven asset available in an increasingly volatile world, demonstrated by the fact that it now supports more central bank reserves than any other single asset. WaL
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