DBG Markets | Middle East Conflict Escalates Oil Could Surge to $150.png (Part 2)

Market Focus Shifted to Oil

Added to this, every war has a different "economic signature." In the Middle East, the immediate concern for the global economy isn't just safety—it is energy.

During the U.S.-Iran tensions, the market's primary fear was a disruption in the global oil supply chain, particularly through critical chokepoints.

· The Shift: Speculative capital that would normally flow into Gold as a geopolitical hedge was instead diverted directly into Crude Oil (WTI/Brent).

· The Result: Oil became the "geopolitical play" of choice. As oil prices surged on supply fears, it fueled concerns of energy-driven inflation.

This drained the speculative momentum that Gold needed to break higher. By absorbing the shock of the conflict, the oil market effectively stole the spotlight, leaving gold to consolidate.

Summary: Gold Did not Fail, but out of spotlight

Gold didn't fail as a safe-haven; it simply faced a market where the Dollar was stronger, Yields were more attractive, and Oil was more urgent.

Gold still benefited as a safe-haven, and this is the reason why, even though it did not surge significantly, it remained supported above its major levels. The war is providing the support (preventing a crash), but the Fed and the USD are providing the resistance (preventing a breakout).

Until there is a clear pivot in geopolitical tensions or a shift in the Fed's outlook at the upcoming March meeting, gold is likely to stay as elevated and stagnant as it currently is.