Nugget News March
30 Day Market Moves
Silver $112.40 (+15.25%)
Gold $6962.99 (+ 14.47%)
Gold Outlook...As the war in Iran intensifies, gold and silver have been pulled down alongside falling markets worldwide. Investors are weighing the inflationary impact of higher oil prices and the growing chance that the Federal Reserve may cut interest rates less than expected. During conflicts, the US dollar often strengthens, prompting foreign countries to sell US Treasurys to protect their currencies from sliding. That sell-off pushes bond yields higher, making bullion less appealing to hold. JPMorgan noted this week that the “risk premium” on gold prices tied to the Middle East conflict could rise by as much as 10%.
-These are the times to buy, when others are selling. We call it opportunity!
Silver Outlook...Even silver was caught up in the selling frenzy, odd for a safe haven asset usually turned to during times of crises. But investors appeared indiscriminate in dumping assets they fear may have gone too far, too fast. The dramatic price rallies that ended in late January saw the silver price gain 72% in a month and 322% from the beginning of 2025, with gold up 30% and 115% over the same periods.
After a sharp drop, the silver price rebounded and has pushed to a new high for February reaching the 50% retracement of the decline. Silver has underperformed gold which has retraced about 70% of its decline. Geopolitical risks have given a boost to precious metal prices but whether that is sustained once hostilities in the Gulf end may depend on what settlement is reached.
-Fundamental reasons for owning gold and silver haven’t changed since January, the reaction of market participants to their rapid rallies was consistent with past instances.
Gold vs War...With the United States now in a shooting war with Iran, how might a protracted conflict impact gold prices? The historical pattern since the 1980s suggests that, beyond an initial safe haven bump, a war alone doesn’t seem to significantly impact the trajectory of gold prices.
As wars drag on, other factors tend to drive the market, particularly monetary policy. Since the 1980s, gold has typically gotten the biggest boost in the run-up to hostilities. For instance, during the long buildup of forces in the Middle East during Operation Desert Shield beginning in 1989, gold gained 15 to 20 percent.
There was another price spike of around 10 percent when the U.S. launched Desert Storm. Similarly, gold got a brief haven boost in 2003 when the U.S. invaded Iraq for a second time to topple Saddam Hussein.
-We also saw a similar pattern when Russia invaded Ukraine. The yellow metal surged above $2,800 an ounce at the onset of the war.
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