West Asia is currently standing on the brink of destructive conflict. The direct conflict that started between America, Israel and Iran on February 28, 2026, has now taken the form of a widespread war. The common belief is that whenever such a geopolitical crisis occurs in the world, investors immediately run towards gold due to fear of uncertainty and its prices start skyrocketing. But this time the market picture is completely opposite. Despite the commotion and tension all around, gold prices are stuck in a limited range.
Crude oil boils in the flames of war
The root of this current controversy lies in Iran’s nuclear program. America and Israel were trying to stop Iran from making nuclear weapons for a long time. In this series, he directly attacked Iran’s important infrastructure and leadership. The consequences of these attacks were very serious, in which the Supreme Leader Ayatollah Ali Khamenei, who had been in power in Iran since 1989, died. This incident has set the entire region on fire and now the heat of conflict has reached Saudi Arabia, Lebanon, Iraq and the United Arab Emirates (UAE).
The most scary aspect of this entire incident is the interruption in supplies from the Strait of Hormuz. This is an important sea route in the world, through which 20 percent of global oil passes. Due to blockage of this route, the prices of crude oil (WTI crude) have jumped from the low level of $ 60 per barrel to close to $ 100 per barrel.
Why has the pace of gold slowed down?
When inflation increases and clouds of war loom, gold is considered the biggest weapon of ‘safe haven’. Still, this time the price of gold is not showing that rise. The biggest reason for this is ‘American dollar’. In this time of crisis, investors around the world have expressed confidence in the dollar more than gold, due to which the dollar has become very strong.
On the other hand, due to fear of rising inflation, central banks of America and other countries may keep interest rates at high levels. A simple rule of economics is that when the dollar strengthens and interest rates go high, the shine of gold begins to fade. This is the reason why despite the ‘geopolitical risk premium’, the strength of the dollar has put a brake on gold’s rally and it is currently going through a phase of consolidation (trading in a limited range).
Where is the price of gold?
If we talk about the international market, between February 28 and March 13 (about two weeks), gold fell from a high of $ 5,277 per ounce to a low of $ 5,054 per ounce. Currently it is trading around $5,165 per ounce. At the same time, in the domestic market, gold which reached Rs 1,69,880 per 10 grams on MCX on February 27, came down to the level of Rs 1,58,400 by March 13.
This stagnation is also surprising because in the last one year, gold has given excellent returns of more than 80 percent. In the year 2025 itself, this precious metal had touched its all-time high more than 50 times.
Will gold make you cry or will it provide an opportunity for profit?
At present, gold is facing a tug of war between many forces. On one side there is war, on the other side the policies of the Federal Reserve. According to market experts, mainly these three situations can arise for gold in the year 2026:
- Possibility of huge rise: If global recession hits and this war in West Asia takes a more severe form, then there can be a huge jump of 15-20 percent in gold prices from the current level.
- Moderate bullish situation: If the pace of the US economy slows down a bit and the Federal Reserve makes a slight cut in interest rates, then an increase of 5 to 15 percent can be seen in gold.
- Fear of decline: If America’s economic growth remains strong and interest rates remain high due to rising inflation, then gold may fall by 5 to 20 percent. However, considering the current geopolitical tension, the scope for this recession seems less at present.