Gold prices gained by the afternoon trade on Friday, with investors favouring haven assets returning amid continued conflict in the Middle East, once again highlighting how gold and silver prices rise during uncertainty. If you’re tracking gold and silver price today, this shift reflects how quickly sentiment can change in volatile markets.
The risk-averse attitude mirrored selling action, with US indices and the FTSE 100 (^FTSE) losing ground, with bets of interest rate hikes ramping up amid prolonged conflict in the Middle East. Fighting continues as U.S. President Donald Trump and Iranian authorities remain at an impasse, directly influencing gold and silver prices today and broader investor behavior.
Precious metals and mining stocks had struggled earlier in the week in torrid market conditions, but rose again on Friday. For investors monitoring gold and silver prices, this rebound signals a short-term opportunity despite ongoing uncertainty.
Gold (GC=F) futures advanced 1.8% by the afternoon to around $4,490 per troy ounce, while spot gold gained 2.9% to $4,494 an ounce. Silver (SI=F) prices rose 1.9% to $69.20, reinforcing the trend where gold prices rise and silver hits a new record during periods of instability.
“The surprise fall in precious metals prices has dragged down the mining sector. During previous eras of high geopolitical tensions, gold and silver prices have been sought out as safe havens. But the volatile moves we have seen in markets have upended norms, pushing down mining stocks,” said Susannah Streeter, chief investment strategist at Wealth Club.
“Antofagasta (ANTO.L), the copper and gold mining company, has seen shares dive 24% since the outbreak of conflict. The sharp sell-off in equities has led to a scramble to cover positions. Also, there’s been a sell-off in government bonds, in particular Treasuries, sparking a rise in yields.
“This makes gold less attractive than such assets, given that gold pays no interest, while the strengthening of the dollar also makes gold more expensive for buyers in other currencies.”
If you’re wondering what causes gold and silver prices to rise, currency strength and interest rates are key drivers to watch.
“Investors are now anticipating rate hikes this year to curb inflation, rather than rate cuts as priced in this time last month,” David Morrison, senior market analyst at fintech and financial services provider Trade Nation, said.
“This is supporting the dollar for now, and gold is finding it difficult to make upside progress as inflation fears accelerate.”
It is one of those City aphorisms that gets repeated with such confidence it begins to sound like natural law: when the world turns ugly, buy gold. War? Gold rallies. Crisis? Gold glitters.
Yet the past week has offered a rather awkward contradiction. As conflict in the Middle East has intensified, bullion has done something deeply unfashionable. It has fallen, challenging the belief that gold and silver prices rise instantly during crises.
Gold has shed nearly 18 per cent since last Friday, including a bruising 5 per cent drop in a single session. Silver, never one to do things by halves, has fared even worse, tumbling by 11 per cent in a day. Volatility has spiked to levels not seen since the financial convulsions of 2008. For an asset class marketed and widely believed to be the ultimate haven, it is an uncomfortable spectacle.
This is why tracking the gold and silver price today is crucial rather than relying on assumptions. Find more about precious metals and what drives their prices high and drag it down through ForexDrift’s.
During times of war and geopolitical crises, investors instinctively move their capital into “safe-haven” assets, which is why gold and silver prices rise. Historically, gold surged over 25% during the 2008 financial crisis and saw a sharp rally again during the 2020 COVID-19 panic.
The reason is simple: unlike currencies or stocks, gold and silver are tangible assets that hold intrinsic value and are not directly tied to any government’s stability. When trust in economies weakens, demand for these metals increases rapidly, pushing gold and silver prices today higher.
Another major factor explaining what causes gold and silver prices to rise during war is inflation and currency devaluation. Conflicts often disrupt oil supply chains and global trade, driving inflation higher. At the same time, governments increase spending, which can weaken currencies. As the US dollar fluctuates, investors hedge by buying gold and silver. Central banks themselves have been major buyers in recent years, with global gold reserves increasing significantly, further supporting the long-term trend where gold prices rise and silver hits a new record during prolonged instability.
But the first mistake is to assume that gold is a kind of moral instrument, rising in righteous protest whenever the world misbehaves. Markets, alas, are not moral; they are mechanical. And in moments of genuine stress, those mechanics tend to overwhelm the comforting narratives investors tell themselves.
The first of these mechanics is brutally simple: margin calls. When markets seize up, losses elsewhere have to be covered, and quickly. Traders do not politely sell their worst-performing assets; they sell what they can. Gold, after a strong run-up, solidly year-to-date, even now, is one of the few places where profits can be realised. So it is sold, not because it has failed, but because it has succeeded.
For traders watching gold and silver prices, this explains sudden dips even in crisis periods.
This is not new. During the initial phases of both the 2008 financial crisis and the COVID-19 panic, gold fell sharply. In each case, it was dragged down not by a loss of faith in its virtues, but by a desperate scramble for liquidity. Only later, once the forced selling abated, did it resume its ascent.
The second force now at work is the rather more technical-sounding “value at risk”, or VaR. As volatility surges, risk models begin flashing red. Portfolios that looked sensible a week ago suddenly appear reckless. Positions are cut, exposures trimmed, and correlations, those comforting assumptions about how assets behave, begin to break down. In such an environment, gold and silver prices are not spared.
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Then there is the question of interest rates, the least romantic but perhaps most decisive factor of all. Gold yields nothing. It sits there, inert, offering neither dividend nor coupon. In an era of falling rates, that hardly matters; indeed, it can even be an advantage. But when expectations shift as they have abruptly in recent weeks, the calculus changes.
The energy shock triggered by geopolitical tensions has upended assumptions that central banks would soon begin cutting rates. Instead, the prospect of tighter policy has re-emerged. Higher rates make income-producing assets more attractive and non-yielding ones, like gold, less so. It is not ideology; it is arithmetic.
This is a critical factor behind fluctuations in gold and silver prices today.
Put these elements together, and the recent sell-off begins to look less mysterious. Indeed, it may even conform to another well-worn market adage: buy the rumour, sell the fact. Precious metals enjoyed a strong start to the year, buoyed by fears of escalating conflict. Now that those fears have materialised, some of that speculative positioning is being unwound.
None of this, however, necessarily invalidates the longer-term case for gold. The structural forces that have underpinned its rise, vast government debts, lingering inflationary pressures, and an uneasy sense that financial markets are priced for perfection remain intact. If anything, a more unstable geopolitical backdrop adds to the argument rather than detracts from it.
For long-term investors, this reinforces why gold and silver prices rise over extended periods.
The point, rather, is that gold is not a simple hedge against bad headlines. It is a complex asset, subject to the same pressures, panics, and technicalities as everything else. In the short term, it can fall precisely when intuition says it should rise. In the longer run, it may yet do what its admirers expect of it.
“The conflict also creates growth risks amid an already uncertain macroeconomic backdrop,” said Nikos Tzabouras, senior market analyst at Tradu. “Should market attention shift to this theme, bullion could find meaningful support. Gold may be down, but its longer-term drivers are far from dead. Central bank buying, de-dollarisation and currency debasement trends may have faded from the headlines, but they remain very much alive.”
But investors hoping for instant reassurance in times of crisis will find that even safe havens can feel distinctly unsafe when everyone is heading for the exit at once.
Staying updated with gold and silver price today is essential for making informed decisions in such volatile conditions. Don’t miss profitable setups, get instant gold & forex alerts on ForexDrift’s Telegram channel.
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This article is written by ForexDrift’s Market Research & Strategy Team, working closely with professional traders, risk analysts, and capital managers to evaluate copy trading and Forex investment models. Using real performance data, live market testing, and transparent risk frameworks, our experts provide practical insights that help investors choose strategies aligned with their financial goals and risk tolerance.
