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When gold sold off at the start of fighting between Iran and the United States in late February, commodity strategists barely batted an eye.
A shock in risk assets – like the one that befell equity markets in the open days of the conflict – typically forces traders to unwind their highly liquid bullion holdings to cover losses in other positions. A similar phenomenon played out following the collapse of Lehman Brothers on the eve of the global financial crisis, and again at the start of the pandemic.
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Gold was supposed to be a hiding place for investors during a Middle East conflict. Instead, since the Iran war started on Feb. 28, the yellow metal has dropped 11%, raising questions about its safe-haven reputation.
That outcome seems backward. Safe-haven assets are supposed to rise in price when the world gets shaky. Yet a new research note from LPL Financial, one of the country’s largest independent broker-dealers with $2.3 trillion in client assets, argues the selloff isn’t a sign of failure.
Rather than simply acting as a refuge, gold is serving a different role right now, writes Kristian Kerr, LPL’s head of macro strategy. It functions as part commodity, part reserve asset and, during periods of stress, a stand-in for dollars.
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The rally that propelled gold and silver to record-breaking highs in 2025 could pick up again if a U.S.-Iran peace deal is reached, market watchers told CNBC as prices ticked higher on Thursday.
Spot gold jumped 1.2% to $4,750 per ounce early on Thursday, amid hopes that the U.S. and Iran could be nearing a deal to bring the 69-day war to an end.
Meanwhile, spot silver added 3% to trade at $79.62 an ounce, and silver futures for July delivery jumped 3.9%.
Gold and silver both enjoyed record-smashing rallies in 2025, surging 66% and 135%, respectively, over the course of the year. However, they have seen much more volatile trade in 2026, with silver futures suffering their biggest single-day blow since the 1980s at the end of January and gold knocking more 10% off its January peak.
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