Gold heads for worst month since 2008 as Iran war hits week five

Gold showed a modest uptick on Tuesday morning, yet the metal remained on course to record its steepest monthly decline since October 2008 as the conflict involving Iran entered its fifth week. Market participants are reassessing gold’s role as a safe haven amid rapid shifts in macro expectations.

The move unfolded amid sharp intramonth swings: spot gold briefly fell toward roughly $4,100 an ounce before recovering into the $4,400–$4,500 range, while some gold-related equities and ETFs suffered deep losses. On a month-to-date basis the drawdown approached double-digit percentages, reflecting heavy liquidation and portfolio rebalancing.

Key drivers include a firmer U.S. dollar and rising Treasury yields, which increase the opportunity cost of holding non-yielding bullion. That backdrop has undercut demand from investors who earlier in the year had sought protection in gold, producing an unusual divergence between geopolitical risk and bullion flows.

In the broader economic context, disruption in the Strait of Hormuz and elevated oil prices have kept inflation and supply-risk narratives alive, complicating central bank policy outlooks. Persistent regional tensions mean energy and risk sentiment channels will likely continue to influence precious metals in the near term.

Analysts say volatility is likely to remain elevated and emphasize scenario-based positioning: should geopolitical tensions escalate, safe-haven bids could return sharply; conversely, sustained dollar strength and higher real rates would prolong the correction. Market forecasts differ, underscoring the importance of active risk management for commodity and equity exposures.