Gold Holds Firm as Oil Goes Wild and Iran Conflict Heats Up

Brian Chu

Hi, I am Brian from GoldHub Australia,

I want to start off with apologising for not having our Weekly Market Wrap-Up in the last two weeks.

Firstly, I've been busy over two weekends, one up in Sydney and then last week in Albury, for family and work trips. Things are all happening as Fat Tail Investment Research launched its successful "Gold's Third Act" campaign that showcased the premium precious metals newsletter, Gold Stock Pro. You'll get a sneak peek of what it has to offer in today's update. So read on!

As you've seen in the news and also the markets, the bombarding of Iran by Israel and the US has been front and centre in the news cycle. Moreover, the markets have become even more volatile.

Before I speak about precious metals, I want to state that all military conflict is tragic. As a result, I hope that you share in our team's thoughts for those who are caught in this conflict. We pray that there can be a resolution that will allow the ordinary folks in Iran, the Middle East and the world to live in more harmony than the turmoil we've experienced so far. It may be idealistic, unrealistic, but we should not give up hope.

Gold, silver and precious metals managed to hold up quite well during this period. The gold stocks, not so much. After the flash crash for the precious metals space in late January and early last month, the metals have held their ground. This may be because the war premium has set in, boosting their traditional safe haven status. Silver, platinum and palladium have temporarily taken this status too, rather than acting as an industrial metal.

Oil has taken centre stage in the commodities market, and the entire asset market for that matter. Last week it increased from US$71 a barrel to close at over US$90.

If that wasn't enough, we started this week with the mother of all oil spikes, and plunges. Fears over the closure of the Strait of Hormuz upending one of the world's most strategic chokepoints caused oil to rip to over US$120 a barrel on Monday noon time. The price of oil closed that day at around US$110.

If you thought that was the drama, you haven't seen the rest of the show. As the US markets opened, President Trump provided an update on his take of the situation in Iran. His comments about how the progress by the US and Israeli military strikes on Iran were well ahead of schedule caused oil to give back most of the gains made on Monday.

Australians woke up to the price of oil back down to around US$85. While its price was similar to that at last Friday's close, oil had made history with its most violent moves in the space of 24 hours.

The uncertainty and volatility in the oil price shook up the gold-oil ratio, pushing it back to around 60, falling to as low as 45. This spooked investors of gold mining companies, which are businesses that consume a large amount of fuel for their activities. The ASX Gold Index plunged by over 17% from its recent highs on Monday 2nd March to Monday 9th March. In the space of six months, gold stocks have experienced three massive up and down periods, with violent selloffs following each rally that took it to new records.

During such times, I believe it's important to watch out that you don't let greed get the better of you. Gold and precious metals assets are into their fourth year of a bull market. Things are getting more volatile and toppy. Even though our medium-term outlook is positive, it's important to remember that many gold stocks are trading at generous levels to their underlying value. For this reason, we urge caution.

Before signing off, let me share with you an excerpt of an update that Gold Stock Pro newsletter members received last Monday.

If you're interested in signing up for one of these newsletters, contact us and we will arrange a special offer for you. We're working on preparing a special sign-up form for you as members of GoldHub Australia. So stay tuned!

I thought I'd provide a brief update on the state of the precious metals market given what happened over the weekend with the strikes on Iran by the US and Israel.

As you may know, the strikes have led to the death of Iran's leader, Ayatollah Khameini, along with a few key military and political leaders. Casualties go beyond just the three nations as Iran hit other Gulf states with missiles and drones.

At this stage, we don't know how long and widespread this conflict will last. It depends on whether the two warring sides' respective allies will join the fray.

Personally, I hope this won't be the case. We don't need more instability in this world.

Over the weekend, I monitored the development of the conflict. Moreover, I kept track of the market's response to the outbreak of hostilities from the cryptocurrency market.

Yes, you read it right.

But not in Bitcoin, Ethereum, or other tokens.

Did you know that there are tokens that track the price of gold, silver, platinum and (partly) crude oil?

Yes, there is something called Pax Gold [PAXG], that is a gold-backed crypto token. It has a large trading volume – some US$700 million trades daily!

Similarly, there's Kinesis Silver [KAG] and Gram Platinum [GRAMP] that track the price of silver and platinum.

For crude oil, the closest I could find was United States Oil Fund [USOON]. This token is very small, with less than US$1 million trading each day. So it's less reliable.

What I saw over the weekend was the Pax Gold initially spiked around 4-5% at the outbreak of the conflict on Saturday evening. However, it gave back more than half its gains for much of yesterday:

Source: Coingecko

This morning it rose gently as the markets opened when gold headed up to nearly US$5,400 (~AU$7,620).

As you have noticed now, it's cooled down a little.

Meanwhile, the US Oil Fund had jumped 20% over the weekend. I initially braced for a big spike in the crude oil prices this morning.

The West Texas Intermediate Crude Oil [WTI] price rose by around 8% at open, trading at almost US$73 a barrel. It has pulled back to just below US$70 after midday.

What does this tell me?

So far, the market sees that the conflicts might not escalate further. However, these can change depending on how much more exchanges of firepower persist.

There's one thing I've been paying attention to on why I think the conflict might be longer than what we saw in June 2025. That was when Israel and Iran exchanged missiles and rocket fire, followed by the US stealth bombers taking out three nuclear facilities belonging to Iran. However, I don't think it will be like Iraq 2003.

What's the key factor in this? Russia.

Russia is Iran's staunch ally. So far, Russian President Putin hasn't weighed in on fighting Israel and the US.

I suspect, and I can't prove it, that there were deals struck between the US and Russia before Operation Epic Fury kicked off.

Should Russia weigh in and intervene against the US and Israel, that will be a different story. Expect that to kick off a proper hot war.

The market hasn't priced this in.

If Russia doesn't do anything, I suspect the US will let up after a while. Israel and Iran's exchange of fire will probably subside like what happened on several occasions in the last two years.

What does this mean for us in this service?

Do you want to punt on the whims of world leaders playing their multi-dimensional chess?

I'm not game for it. Have experienced too many cases where putting my cash on geopolitical developments backfired dearly.

Let's focus on the fundamentals of the precious metals market and the companies. It's not our field.