The gold price reacts to news from the USA and Iran. The expert warns against harmful speculation
The price of gold has fluctuated greatly in recent weeks. After the outbreak of war in the Middle East (the US and Israel attacked Iran), it seemed that the ore would be a good safe haven. And in fact, in the first reaction its prices went up significantly: temporarily they reached around $5,418. per ounce (i.e. slightly below the all-time high of $5,595 recorded at the end of January).
Later, however, there were significant declines. At one point – on Monday, March 23 – the rate dropped to $4,101, the lowest level since mid-November 2025. This meant a drop of almost 27%. from January's historic highs.
There was a slight rebound on Tuesday, and on Wednesday at noon the gold price was up 1.9%, to $4,556. per ounce. When converted into our currency, the price of gold increased at a similar rate, to almost PLN 16,760 per ounce.
It is worth noting that there is also some breathing space on the stock markets. European stock exchanges opened today with significant increases (there were also visible gains on the Warsaw Stock Exchange), which is a reaction to unofficial reports about a peace plan being prepared in the Middle East. According to the New York Times, the US gave Iran a 15-point plan to help end the war. The markets are seeing an improvement in sentiment, but there is no great optimism and there is still skepticism as to whether this plan will actually end the war quickly.
Gold is usually associated with an instrument that is intended to protect property against such extraordinary situations as war, but in this case, reports about the end of the conflict may serve the purpose of the precious metal. Why? The reason is the specific nature of the conflict in the Middle East, the main economic impact of which is the blockade of the Strait of Hormuz, which is crucial for the export of energy resources such as oil and gas. The prices of these raw materials skyrocketed after the attack on Iran, which raised concerns about the return of inflation.
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This, in turn, caused the financial market to start pricing in interest rate increases by central banks around the world, and in the case of the USA, their expected scale was reduced and the date of easing was postponed. These phenomena adversely affected the price of gold: the higher interest rates, the greater the opportunity cost of holding gold, which – unlike bonds – does not pay interest. In other words: a drop in interest rates creates favorable conditions for gold prices.
Increasing chances for peace in the Middle East and falling energy prices, which reduce the risk of rate increases, are helping gold prices. This phenomenon is also related to the dollar, which has been a real safe haven in recent weeks. After a period of strong increases, the dollar index (DXY) slowed down slightly around the level of 100 points, and US bond yields decreased slightly, which immediately increased the attractiveness of gold as a non-interest-bearing asset.
Earlier, there were reports (including about Russia and Turkey) suggesting that some countries began to liquidate gold reserves to save their currencies, which additionally burdened the gold exchange rate. Any reduction in supply by central banks would have a positive impact on the exchange rate.
Gold is sometimes treated as a speculative asset. Is it right?
Buying into an oversold market may also have been a significant factor. Gold has been in a downtrend for the last 9-15 sessions. Level 4100 – $4300 per ounce turned out to be strong technical support, which provoked speculative capital to “buy the dip” purchases (buying near the lows).
The price of gold in recent months has not been similar to that of the stable precious metal. The silver market was even more volatile.
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— We observe a very repeatable pattern – when gold prices fall, demand immediately increases. Poles understand market mechanisms better and better and use corrections to make purchases. Importantly, this is not a one-off phenomenon – the entire year of 2025 was very good in terms of demand, and the current price decline has only further strengthened this trend – says Jarosław Żołędowski, president of Mennica Skarbowa, a company listed on NewConnect dealing with the distribution of investment gold and other precious metals.
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He estimates that the global gold market today is driven by several factors at the same time – geopolitical tensions, inflation, actions of central banks and the growing activity of individual investors. According to the president of Mennica Skarbowa, this creates strong foundations for further growth.
— But on the other hand, we also observe that more and more people treat gold as an investment comparable to purchasing shares on the stock exchange or cryptocurrencies. I will repeat like a mantra that gold is a long-term investment and still a safe haven for our savings. We can assess the return on investment no sooner than 3-5 years after the investment. It is not worth investing in gold speculatively, says Jarosław Żołędowski.
