Geopolitical hotspots continued to escalate in 2026, which was reflected in gold demand. At the end of January, the gold price in the Eurozone rose to a high of 146.90 € per gram but then dropped before reaching a new all-time high of 147.29 in early March in reaction to the start of military hostilities between Israel and the US against Iran.
Rapidly rising gasoline prices ensued and, consequently, a high risk of inflation. Nevertheless, gold has recently declined and stood at 133 € per gram in mid-March. How does this development align with gold’s perception as a safe haven? And has this happened frequently in the past? A recent study by OCBC Group Research sheds light on these questions.
Gold price 2026: why gold weakens in the short term despite crises
Currently, the gold price is primarily weighed down by two factors: the US dollar’s appreciation against the euro and US investors’ disappointed expectations regarding a Fed interest rate cut. This, however, should not alarm investors, as gold fulfills its role as a safe haven in the long term. The OCBC study shows that the gold price has frequently declined in the short term during nearly all major crises since the turn of the millennium but has mostly risen over the course of a crisis due to increased demand. To this end, price movements immediately at the onset of a critical event were compared with those three months on.
Analysis since 2000: in five out of six crises, gold price rises significantly
The OCBC study examined gold price trends during the US invasion of Iraq, the global financial crisis, the Arab Spring and the subsequent civil war in Libya, the COVID-19 pandemic, the Russian invasion of Ukraine, and during last year’s 12-day Israel-Iran conflict, which preceded the current hostilities in the Middle East. In nearly all these events, the gold price initially dropped slightly, by up to 2 percent. Except for the Russian invasion of Ukraine, the gold price then recovered to a level between 6.5 and 8 percent higher after three months compared to the start of the respective crisis.