Whenever there is a major geopolitical crisis or war in the world, the common investor first turns to gold to keep his hard-earned money safe. Our faith in the yellow metal is generations old. But, the US-Iran war that broke out in March 2026 has completely overturned this traditional rule of investment. The surprising thing is that the currency of America, which is directly looming over the clouds of war, i.e. ‘American Dollar’ remains the first choice of investors at this time. At the same time, gold, which is always considered safe in times of crisis, is falling rapidly. Let us understand why this big upheaval is taking place in the global market and what effect it can have on your savings.
Gold lost its shine, figures shocked
If we look at the market data, the whole story becomes very clear. At the beginning of the war, i.e. on March 2, there was a huge jump of Rs 8,500 in gold prices in a single day. Then it seemed that gold would repeat its old history. But as the war intensified, a sharp decline in gold prices began. By March 23, the price of gold fell to Rs 1,35,846. This is a huge decline of about 14.3% from its highest level. On the contrary, the dollar index, which fell by almost 10% in the year 2025, is now making a strong comeback. Amidst this war, the dollar has seen an increase of more than 2% in the month of March alone.
The oil game behind this flight of dollars
Now the biggest question that arises is why is the dollar becoming so strong despite being directly involved in the war? Sugandha Sachdeva, founder and market expert of SS WealthStreet, considers the ‘petrodollar’ system as a major reason behind this. In fact, the buying and selling of crude oil across the world is mainly done in dollars. Due to the continuous blockade on the Strait of Hormuz, the supply of crude oil has been disrupted and its prices have gone up. Oil becoming expensive simply means that countries will have to spend more dollars to buy it, which has led to a huge increase in the demand for dollars globally.
Apart from this, independent market expert Adeeb Noorani says that rising oil prices have increased the fear of inflation. To keep this situation under control, interest rates in America are expected to remain high for a long time. When bond yields and interest rates rise, investors move money to places where they can get direct returns. In such a situation, the US dollar seems more secure and attractive to investors compared to gold without interest. Also, America itself has become a big exporter of crude oil, so this oil crisis is not affecting it as badly as Europe or Asia.
Will the dominance of gold end forever?
Looking at all these current circumstances, it is natural for the common investor to ask the question whether it is not wise to invest in gold now? Experts believe that even though the dollar has overtaken gold at this time, this situation is not going to last forever. According to Sugandha Sachdeva, America’s aggressive policies, such as imposing arbitrary tariffs, imposing sanctions and the country’s increasing debt, are weakening global trust in the dollar-based system in the long run.
Even though cash (dollar) is dominant in this current period of expensive oil and tension, gold can never lose its existence. In future, whenever there is a crack in the world’s financial system or there is a fall in the value of currency, gold will emerge as a strong shield. Therefore, from a long-term perspective, gold is still an excellent and reliable means of keeping your wealth safe.
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