29/03/2026
Gold dropped 21% during a war. I want to talk about why.
Every trader knows the rule. War breaks out, gold goes up. It happened in 1979, it happened in 1990, it happened in 2022.
This time gold fell from $5,596 down to $4,384 while the bombs were still dropping.
A lot of people called it confusing. It's actually not, once you follow the chain.
When Iran threatened the Strait of Hormuz, oil crossed $100. That single move put enormous pressure on any country that imports energy, which is most of the world. Their import bills went up, they needed more dollars to pay them, and that crushed their local currencies.
When your currency is under pressure and you need liquidity fast, you sell your most liquid asset. For most central banks right now, that's gold.
The same central banks that spent three years buying gold aggressively, Poland, Turkey, Kazakhstan, suddenly had no choice but to flip to selling. Not a strategic decision. A forced one.
Then the Fed made it worse. Inflation was rising again because of energy costs, so they held rates steady in March. Gold pays no yield, so when real rates are high, big institutional money rotates out. Both forces hit at the same time.
Some people are calling this War-Flation. War plus inflation plus tight monetary policy running together. It's a combination the standard models weren't built for.
So where does gold go from here?
If the war continues, oil stays high, the Fed stays tight, and gold could push below $4,000. $3,800 is the level most analysts are watching.
If a ceasefire happens, oil falls, inflation cools, and the Fed starts cutting again. Central banks come back as buyers almost immediately. Goldman Sachs has a $5,400 year-end target. JPMorgan was at $6,300 before the war started.
The point isn't to predict exactly which way it goes.
The point is that gold didn't fall because of the war. It fell because of a chain reaction the war set off, starting with a barrel of oil. Most traders were watching the headline. They missed the chain.
Reading the chain is the whole game.