Gold and geopolitical turmoil in the Middle East have a long, intertwined history. Every time the region erupts in conflict, investors turn to gold, and prices rise. And just as often, those gains fade once the dust settles.

However, that pattern may be changing. While the current crisis has pushed gold to record highs, deeper structural forces suggest this rally could last longer than expected. The truth is, even if the fighting stops, the economic battle isn’t over.

War Drives Gold Higher

From the collapse of the Ottoman Empire to the latest skirmishes between Israel and Iran, the Middle East has been a powder keg of geopolitical tension. And gold, prized for millennia as a store of value in uncertain times, has responded predictably.

In the 1970s, the Yom Kippur War and the OPEC oil embargo sent gold soaring as inflation exploded and confidence in the dollar collapsed. Prices climbed from $35 an ounce in 1971 to over $800 by January 1980.¹

In 1990, gold jumped again after Iraq invaded Kuwait. But when the U.S.-led coalition launched a swift and decisive campaign, confidence returned, and gold retreated. The rally was short-lived.

This “buy the rumor, sell the fact” phenomenon has repeated itself more than once. Markets anticipate disaster, and when it doesn't materialize, or is resolved faster than expected, investors take profits and move on. But the economic backdrop today is far more fragile. And the risk runs much deeper than headlines suggest.

Is Today’s Conflict Just the Beginning?

In 2025, the Middle East is once again on edge. The war in Gaza, Red Sea shipping attacks, and Iran’s military involvement have helped pushed gold to unprecedented heights. Gold touched $3,500.20 per ounce in April 2025, an all-time high. Just 16 months ago, it traded at $2,135.²

Some analysts argue the conflict is already “priced in.” But even if peace returns tomorrow, gold’s rally may continue. Why? Because the global economy is buckling under long-term pressures that no ceasefire can fix.

Structural Risks Fuel Gold’s Momentum

Geopolitical events are rarely the sole drivers of gold. But in today’s fragile environment, they add to a perfect storm of economic stress.

The U.S. is staring down a fiscal cliff. Trillions in new spending and tax cuts are ballooning the deficit, while interest payments on the national debt are exploding. The financial foundation is cracking, and investors are taking notice.

As Bank of America’s metals team recently noted, “Rates volatility and a weaker USD should then keep gold supported, especially if the U.S. Treasury or the Fed is ultimately forced to step in and support markets. As such, while wars and conflicts are usually not sustained price drivers, we see a path for gold to rally to $4,000/oz over the next 12 months.”³

Meanwhile, central banks, especially amongst the BRICS+, are racing to stockpile gold. Over the past decade, their reserves have grown from 13% to nearly 18% of the size of U.S. public debt. That’s not a coincidence. It’s a clear message: trust in the dollar is eroding.⁴

Technicals also support the trend. Despite record prices, gold remains under owned. Global portfolios still hold just 3.5% in gold, far below 2011 levels. The runway for growth is wide open.⁵

What's Next for Gold

The next move in gold depends on two things: whether conflict in the Middle East escalates, and what the Fed does with rates. If war spreads or the Fed pivots dovish, gold could push past $3,500 with ease. If things calm down, gold might consolidate, but don’t expect a crash.

The long-term story is already in motion. The debt isn’t shrinking. Inflation isn’t going away. Central banks aren’t slowing their gold buying. And faith in fiat currency continues to decline.

In an ideal world, where there is peace, no inflation, and calm trade relationships, some analysts see gold dropping to $2,400. But we don’t live in that world. In the real one, projections are climbing, with some targeting $4,000 by mid-2026.⁶

Conclusion

In short, the old patterns may not hold. Gold has always spiked during Middle East conflicts. But this time, it might not fall when the dust settles. It’s a barometer of a system under stress, from Washington to Wall Street to central banks across the globe. This time, war may be just one factor in a longer, more durable rally.

For Americans looking to preserve wealth and hedge against what’s coming next, physical gold offers something few assets can: independence, resilience, and a history of delivering in uncertain times. Especially when it is held in a Gold IRA. You can learn more about protecting your savings from the financial fallout of war by calling American Hartford Gold today at 800-462-0071.
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Max Baecker is the President of American Hartford Gold (AHG), the nation’s largest retailer of precious metals. He leads American Hartford Gold’s mission to help clients achieve long-term financial security with physical gold and silver.

Under his guidance, American Hartford Gold has delivered billions of dollars’ worth of precious metals to thousands of satisfied clients.

Max's dedication to upholding American Hartford Gold's industry-leading standards is reflected in its accolades. American Hartford Gold has made numerous high-ranking appearances on the prestigious Inc. 5000 List of America’s Fastest-Growing Private Companies. AHG holds an A+ Rating from the BBB and a 5-Star Rating on Trustpilot from thousands of American Hartford Gold reviews. American Hartford Gold is the only precious metals company trusted and recommended by Bill O’Reilly.

AHG offers investment-grade gold and silver coins and bars at competitive prices. Clients also benefit from its buy-back commitment with no back-end fees. To learn more, visit American Hartford Gold.

Notes:

1. https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart

2. https://www.ig.com/en/news-and-trade-ideas/Why-gold-has-soared-to-3500-the-key-factors-driving-the-2025-precious-metals-rally-250422

3. https://www.kitco.com/news/article/2025-06-16/middle-east-chaos-wont-drive-gold-prices-4000-will-bank-america

4. https://www.kitco.com/news/article/2025-06-16/middle-east-chaos-wont-drive-gold-prices-4000-will-bank-america

5. https://www.kitco.com/news/article/2025-06-16/middle-east-chaos-wont-drive-gold-prices-4000-will-bank-america

6. https://www.kitco.com/news/article/2025-06-16/middle-east-chaos-wont-drive-gold-prices-4000-will-bank-america