We are writing this on day six of the US-Israel war against Iran. Things are moving fast and a lot of what we say here could be overtaken by events before you read it. That is the nature of writing about a live conflict. But we think the framework matters more than the specifics and we want to lay out how we are thinking about this in real time. The relationship between the Iran war and gold is what everyone is asking about. Here is our take.
A month ago we wrote about why we bought metals on a pullback. The reasoning was simple. Oil was starting to roll, rates looked like they had peaked, and we believed the long-term metals cycle was intact. We were leaning toward silver because the gold silver ratio had stretched back into the 70s.
Then the strikes on Iran started on February 28 and the entire picture shifted. Not the long-term picture but the short-term one. Oil surged over 20% in a couple of days, and the Strait of Hormuz is effectively closed. Bond yields that had been rolling over reversed course as markets started pricing in higher inflation from energy costs. The dollar strengthened, stocks sold off, and gold spiked to $5,400 before pulling back into the low $5,000s. A lot happened in a few days.
Everything we wrote about in our interest rates and gold piece is still in play. It just got more complicated in the short term. Here is how we are reading it.
Why We Think This War Ends Quickly
We could be wrong about this. Wars are unpredictable and this one involves a country with the largest proven oil reserves in the world retaliating across the entire Gulf region. Six US soldiers are dead. Iran is launching missiles at US bases, Gulf states, and Israel simultaneously. This is not a minor skirmish.
But we think the dynamics around Trump’s approach to military action point toward a short conflict. He has historically favored fast decisive strikes over extended engagements. The political cost of a prolonged war is high for someone who ran against the war machine. The longer this goes on the more his base will question whether this is the kind of intervention he promised to avoid. And he has a built-in off-ramp. If Iran agrees to verifiable terms on its nuclear program, there is a face-saving exit for both sides. The strikes have already destroyed significant military infrastructure and killed the supreme leader. The leverage exists to negotiate from a position of strength without occupying the country.
Goldman Sachs published an analysis saying the oil market is pricing in roughly a four-week disruption. We think it could be shorter than that. But even if it takes a month, the key point for metals investors is what happens after the war ends, not what happens during it.
What Oil and Rates Are Doing Right Now
Oil has surged and that is pushing inflation expectations higher in the short term. When oil spikes, the cost of everything else follows. That creates a problem for the Fed because they were on a path toward cutting rates and now the inflation picture has gotten muddier. Bond yields that had been drifting lower reversed and jumped. The market started wondering if the Fed would need to hold rates higher for longer to deal with energy-driven inflation.
This is exactly what we warned about in our interest rates piece. The path down for rates was never going to be smooth. But we think this disruption is temporary. If the war wraps up in the next few weeks and oil comes back down, the inflationary pressure from energy unwinds fast. The underlying economic weakness that was pushing yields lower before the war started has not gone away. It has been masked by the oil spike. Once that clears, the same forces that were pulling rates down will reassert themselves.
That sequence matters enormously for gold and silver.
The Iran War and Gold: Why It Is Holding Up
Gold spiked to $5,400 when the war started and has been trading in the $5,100 to $5,300 range since. It has not collapsed. It has not given back the move. It is sitting there digesting the situation while everything else whips around.
We like seeing that. Gold was already in a strong position before any of this started. It had just come off its first full week above $5,000. Central banks were buying aggressively. The macro backdrop of weakening growth, falling confidence in fiat currencies, and rising geopolitical instability was already in place. The Iran war and gold’s response to it are telling the same story they have been telling for over a year. The trend was already in motion. The conflict just added another layer of urgency on top.
Here is the part that might sound counterintuitive. We think gold goes higher after the war ends, not during it. During the conflict, money is flowing into the dollar as a safe haven and that puts a short-term cap on gold in USD terms. Oil-driven inflation fears are also creating uncertainty about the rate path which keeps some buyers on the sidelines. But once the conflict resolves and oil normalizes, the dollar bid fades and the rate-cutting path opens back up because the underlying economy is still weak. That is when gold gets the room to run. The war is a disruption to the sequence we laid out in our interest rates framework, not a change in direction. The direction was set before the first strike and we do not think it has changed.
Silver Is More Complicated Right Now
Silver dropped sharply in the initial chaos. That is typical. Silver moves harder in both directions and in a panic scenario it sells off with risk assets before it catches a bid as a precious metal. We wrote about this dynamic in our silver vs gold post and it is playing out exactly as described.
The industrial demand side of silver also faces short-term headwinds from the war. Supply chains through the Gulf are disrupted. Manufacturing activity could slow if oil stays elevated. But these are temporary problems. The structural demand from solar, electronics, and EVs has not changed. If anything, energy security concerns from this war will accelerate the push toward renewables which is bullish for silver’s industrial demand over the medium term.
We are not worried about the silver pullback. If you were buying precious metals on a pullback before the war started, the case has gotten stronger not weaker. The gold silver ratio has jumped again which is the kind of setup we want to be acting on if we are playing the long cycle. We expected silver to get hit harder than gold in the initial chaos. That is what silver does. The question is not whether it falls during a panic but where it goes once the panic clears.
What the Iran War and Gold Signal Means for Our Buying
We are accumulating. Not trying to be heroes about it. Just buying steadily the way we always do. We wrote about dollar cost averaging into gold and silver for a reason and moments like this are when that approach earns its keep. You do not need to know when the war ends or where the exact bottom is. You just need to keep building your position at prices that will look reasonable from the perspective of where we think this cycle is going.
The Iran war and gold’s behavior through it have reinforced everything we wrote about in our interest rates framework. We believe the war resolution is the catalyst that unlocks the next leg higher in metals. Once it ends, oil normalizes and rates resume the path lower that was already forming before the conflict started. Money flows out of the dollar safe haven trade and into everything that was being held back. Gold and silver benefit enormously in that environment.
And then later, as we outlined in our 80% crash article, rates do not just stop falling. They keep going because the economy is weaker than people realize. That is a different phase and a different conversation. But it is coming.
Right now we think the window to accumulate is open. Browse our gold coins, gold bars, silver coins, and silver bars and see what makes sense for your situation. And if you want to understand how we think about how much to own, we have written about that too.
These are intense times. Every month brings something new. We will keep sharing how we see it as things develop.
This is not financial advice. It is how we are reading the situation and what we are doing about it.
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