Recently, I’ve been analyzing how gold moves in these times of tension in the Middle East, and honestly, there’s a lot of noise but few certainties. The reality is that the Fed remains the dominant factor, not the geopolitical conflicts. That said, when things get ugly in that region, gold reacts, but not always in the direction you’d expect.

What’s interesting is that the pattern repeats: before the conflict, it rises out of fear; afterward, it falls when confirmed. It happened in the Gulf War (rose 17% beforehand, fell 12% afterward), in Iraq 2003 (rose 35%, fell 13%), and now in 2026 with the US-Iran escalation, we see the same. The market buys the rumor and sells the fact, always.

But there’s a factor changing the game: de-dollarization. Central banks keep accumulating gold, and that’s different from what was happening 20 years ago. If the conflict gets truly out of control — and here’s the key — the combination of demand for hedging, soaring inflation, and pressure for de-dollarization could break the ceilings set by the Fed.

In the short term (now, April-May), gold will be weak. A strong dollar, high interest rates, and expectations that the Fed won’t cut rates so quickly put downward pressure. Additionally, if oil prices rise due to the conflict, inflation rebounds, and that justifies higher interest rates, which makes holding gold more expensive. It’s a complicated inverse chain.

What to watch is whether the US can control the situation. If yes, in 60 to 180 days, gold will return to previous levels. If not, if things spiral out of control, that’s where de-dollarization and central bank purchases will take on real prominence. Gold would have no ceiling.

Historically, the US has always shown the ability to control: quickly during the Gulf War, also in Iraq. But now, the context is different. The global order is reconfiguring, geopolitical fragmentation is happening, and de-dollarization is not just a concept but a real strategy for many countries. That gives gold a role it didn’t have before: a long-term strategic asset, not just a temporary refuge.

The key question is who wins: the Fed’s interest rate policy or the demand for hedging against geopolitical risk? For now, the Fed is winning. But if the conflict expands uncontrollably, that balance will shift. Meanwhile, any rally in gold will likely be hard to sustain in the short term. The important thing is to monitor whether the US maintains control or loses momentum, because that will determine whether we’re facing a prolonged bullish market for gold or just passing volatility.