Gold is traditionally considered a very ‘safe’ asset that investors rush to during times of war, political instability, or economic turmoil. Historically, major geopolitical crises, from the Gulf War to the Russia-Ukraine conflict, have triggered sharp rallies in gold prices as investors look for security outside volatile stock markets and currencies.
However, the latest escalation in the Middle East involving Iran, Israel and the United States has not produced the dramatic surge many analysts expected. Instead, gold prices have remained relatively steady, surprising traders and market watchers worldwide.
Experts say several factors, from interest rate expectations to strong global currencies and cautious investor sentiment, are preventing the precious metal from staging the typical wartime rally seen during previous geopolitical shocks across global markets.
Why Hasn’t Gold Risen In Price?
The latest geopolitical tensions in the Middle East escalated after growing military confrontation involving Iran, Israel and the United States. Missile exchanges, air strikes and military mobilisation across the region have raised fears that the conflict could expand into a wider regional war involving several countries.
Now, often, during such conflicts, gold prices surge sharply as investors seek protection from market volatility.
However, this time, despite rising geopolitical uncertainty, the reality was that over the past few days or weeks, gold has either remained steady or even declined in price.
On March 9, 2026, Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said, “Gold traded slightly weaker near $5,100, down about 1.50%, while MCX Gold slipped ₹700 to ₹1,60,900. Rising inflation concerns amid ongoing war-related risks are making the Federal Reserve cautious on rate cuts, which is limiting fresh upside momentum in bullion. As a result, gold has been moving sideways over the past few sessions. For now, MCX Gold is expected to trade within a range of ₹1,58,000– ₹1,64,000, with geopolitical developments and interest rate expectations remaining key drivers.”
However, the rates did see an impressive jump for silver and a modest one for gold on March 10, as Research Analyst Gaurav Garg from Lemonn Markets Desk claimed that this could be due to the comments made by US President Donald Trump about a possible resolution for the ongoing crisis between the US, Iran and Israel.
The 99.9% purity variety of gold saw a price increase of Rs. 400, or 0.24%, trading at Rs. 1,64,700 per 10 grams (inclusive of all taxes). The previous trading session closed the gold rate at Rs 1,64,300 per 10 grams.
However, according to a Forbes India report, analysts had expected a larger price jump, with gold estimated to reach nearly Rs. 2 lakh per 10 grams in India.
Saurabh Gadgil, chairman and managing director, PNG Jewellers, was quoted by Forbes India saying, “The frenzy people expected hasn’t happened… Many thought gold would touch Rs1.75-1.8 lakh, but that excitement has subsided, and the market is in a wait-and-watch mode.”
According to analysts at Morgan Stanley and other institutions, the dollar’s relative strength could still be a major reason gold prices haven’t jumped sharply.
This is because gold is priced in dollars in the international market; when the dollar strengthens, gold becomes more expensive for buyers in other countries due to the exchange rate.
In India itself, the rupee becoming weaker in front of a strong dollar could lead to traders being unable to buy as much gold as they’d want. Currently, 1 Indian Rupee equals 91.96 US Dollar. This breach of over Rs. 90 happened in 2025 itself, when the rupee weakened by 5%.
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According to reports, gold already jumped from Rs. 81,798 per 10 grams at the beginning of 2025 to Rs. 1,32,640 by December that same year.
Industrialist Harsh Goenka said, “Gold’s trajectory has been influenced by real interest rate cycles, dollar movements, central bank reserve diversification and global liquidity phases.”
Investors also often favour assets that strengthen the dollar, such as U.S. Treasury bonds, which leads to a rise in the dollar and, eventually, in gold as well.
According to the Forbes India report, gold was already at a high price before the crisis, which may have contributed to the less extreme spike than expected.
Instead, it was oil that traders gravitated toward, which made sense given the concerns regarding any possible disruption to the Strait of Hormuz.
Gadgil explained that “Gold corrected by almost Rs. 5,000 after some of the pent-up demand was fulfilled on Monday because there was margin pressure on COMEX. A lot of investors shifted from gold futures to crude futures as oil started rallying.”
Another reason could also be that due to the extremely liquid nature of gold, which means that it can be easily and quickly sold in the market to get quick funds, it is not allowing for its price to jump as much as expected.
In times of crisis, investors might seek to offset losses in other sectors by selling their gold. Which again would mean that instead of rising, the prices could remain steady or even decline.
Surendra Mehta, national secretary of the India Bullion and Jewellers Association Ltd, commented about how gold was witnessing a resistance against crossing over $5,400, even through such a crisis, saying, “This is not a good sign for gold at present as it seems gold is being sold off to buy arms and ammunition by a few small countries to protect themselves.”
Another key factor is that investors believe the conflict may remain limited rather than escalating into a full regional war. Financial markets often respond dramatically only when geopolitical events threaten major economic systems.
Image Credits: Google Images
Sources: Forbes India, Fortune India, Reuters
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This post is tagged under: Gold,Gold rate, Gold war, Gold silver rate, stock market, war,
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