Fires and Glows: The Safe-Haven Feast of Gold and Silver

In the spring of 2026, the global markets' focus is on two things: the fires in the Middle East and the brilliance of precious metals.

As Iran announced the blockade of the Strait of Hormuz and news of escalating US-Iran conflicts spread worldwide, gold and silver—two traditional safe-haven assets—are writing a magnificent rally. By early March, international gold prices had broken through the $4,500 per ounce mark, and silver prices once reached a historic high of $71 per ounce. Year-to-date, gains have exceeded 70% for gold and 137% for silver—almost twice the increase of gold.

Safe-Haven Demand: Capital Flows Amid Gunfire

"The shot of the cannon, a thousand ounces of gold"—the old saying is once again proven in the spring of 2026.

On February 28, local time, the US and Israel launched airstrikes against Iran, followed by Iranian counterattacks, rapidly spreading conflict across the Middle East. What further spooked markets was Iran's announcement of a complete blockade of the Strait of Hormuz—this vital energy artery accounts for about 20% of global oil shipping. The sudden escalation of geopolitical tensions caused global investors' safe-haven sentiment to surge into the precious metals market.

Data shows that US-listed gold ETFs recorded approximately $4.5 billion in net inflows in February, bringing the total inflow for the year to $10.5 billion, well above the $6.3 billion in the same period in 2025. Institutional funds are reallocating from traditional bonds and stocks into physical assets like gold as a hedge in their portfolios.

Inflation Expectations: The Dual Logic of Oil Price Transmission

The blockade of the Strait of Hormuz directly pushed up international oil prices. The surge in crude oil prices reinforced the upward logic of precious metals through two pathways.

The first is inflation transmission. Rising oil prices increase costs across transportation, manufacturing, agriculture, and other sectors, intensifying global inflation pressures. As a natural inflation hedge, gold's price support logic is consequently strengthened.

The second is monetary policy dynamics. The spike in oil prices raises concerns about inflation rebound, directly affecting market expectations for the Federal Reserve to cut interest rates. Traders' expectations for a rate cut within the year have narrowed from about 60 basis points before the conflict to around 35 basis points. This complex macro environment, paradoxically, enhances gold's relative attractiveness—rising inflation expectations and potential declines in real interest rates reduce the opportunity cost of holding non-yielding assets.

Structural Support: Central Bank Gold Purchases and Industrial Demand

Beyond short-term safe-haven sentiment, the rise of gold and silver is supported by deeper structural forces.

Global central banks, especially those in emerging markets, are continuously and massively buying gold, becoming a key force in breaking the traditional supply-demand balance of gold. This long-term strategy aims to optimize foreign exchange reserve structures and hedge geopolitical risks. According to the World Gold Council, 95% of central banks plan to continue purchasing gold over the next year, forming a strategic "bottom line support" for gold prices.

Silver exhibits a unique dual nature. It follows gold's safe-haven logic but also benefits from sustained industrial demand in solar panel manufacturing, electric vehicles, and semiconductor production. The resonance between its industrial and financial attributes makes silver's price elasticity far greater than gold's.

Future Outlook: Roller Coaster or Long Bull?

The precious metals market is not a smooth ride. In early March, gold prices once sharply declined over 6% from recent highs, performing a "quick dip after a surge." Profit-taking, liquidity needs, and adjustments in rate cut expectations could trigger intense volatility in the short term.

However, most institutions remain optimistic about the medium to long-term outlook. State Street Global Advisors' report predicts a target range of $4,750–$5,500 per ounce for gold in the basic scenario, with an optimistic scenario reaching $5,500–$6,250. Goldman Sachs believes that gold has shifted from a traditional safe-haven asset to a "sticky hedge" tool, with its rally deeply tied to risks of fiscal out-of-control and concerns over the monetary credit system.

Huachuang Securities analysts point out that escalating Middle East tensions could boost global safe-haven sentiment, strengthening the safe-haven attributes of gold and other precious metals; if the conflict persists and drives inflation higher, the upside potential for precious metals will further expand. $XAU

Conclusion

The fires in the Strait of Hormuz are rewriting the logic of global capital allocation. The glow of gold and silver is not only a response to short-term risks but also a confirmation of long-term structural changes. In this safe-haven feast, what investors should truly focus on is not short-term fluctuations but the increasingly strategic value of precious metals in macroeconomic battles. #黃金白銀走高