Gold prices retreated this week despite the escalating US-Iran war, defying the historical pattern of precious metals rising during conflicts. The move suggests large institutional investors are betting on a quicker resolution than current headlines indicate.
According to BlackRock Investment Institute, geopolitical risks are at “extraordinary” levels for early 2026, but institutional investors are differentiating between short-term impact (oil prices) and medium-term realignment (supply chain reconfiguration).
The gold decline may also reflect forced selling by funds covering losses in other positions hit by the oil surge — a technical phenomenon that masks real market sentiment.
