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Gold<\/a> surged during the 12-day war with Iran last year and then gave up its gains when a ceasefire was announced. But, two weeks into the latest conflict, its price remains largely unmoved.<\/p>\n Gold rose<\/a> from $5,296 to $5,423 per troy ounce after the U.S. and Israel launched strikes on Iran on Feb. 28, aligning with the axiom that geopolitical turmoil pushes investors toward traditional “safe haven” assets.<\/p>\n But a sell-off saw prices fall more than 6% to $5,085 on March 3. This week, as the conflict has escalated, it has traded between $5,050 and $5,200. Spot gold was last seen trading at $5,175 per troy ounce.<\/p>\n Stock Chart IconStock chart icon Gold prices over the las five days.<\/p>\n Several factors can explain the lack of upward momentum, including a stronger dollar and higher Treasury yields, according to Ross Norman, CEO of precious metals website Metals Daily<\/a>.<\/p>\n Norman added that rising oil prices could lead to prolonged inflation and potentially higher interest rates as central banks struggle to contain the fallout from a closure of the Strait of Hormuz, the critical maritime corridor for oil and gas.<\/p>\n Higher rates tend to increase the relative appeal of yielding assets such as government bonds versus non-yielding precious metals like gold.<\/p>\n “Gold and silver’s price movements look lackluster just now, but perhaps that’s the way to feel after some epic moves over the last few months,” Norman told CNBC by email.<\/p>\n He added that some institutional investors have become nervous about holding bullion because it has been unusually volatile.<\/p>\n Another explanation is that conflicts trigger a wave of panic selling among investors, causing a “flush” where traders are forced to sell their positions as prices fall, according to Amer Halawi, head of research at Al Ramz.<\/p>\n “If there is a liquidity crunch, everything would be sold until people make sense of this and the right assets get refocused,” he said, speaking to CNBC’s “Access Middle East” on Tuesday.<\/p>\n “Traditionally, when there is a shock, even gold sells off and picks up later.”<\/p>\n Bank forecasts remain bullish despite the short-term volatility. J.P. Morgan predicts prices will reach\u00a0$6,300 per ounce by the end of 2026, while Deutsche Bank is standing by a $6,000 year-end target, per their recent notes.<\/p>\n![\"hide](\"https:\/\/static-redesign.cnbcfm.com\/dist\/a54b41835a8b60db28c2.svg\")
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