Veteran investor Peter Schiff on Sunday said traders were drawing the wrong lesson from the gold selloff during the escalating conflict between the U.S. and Iran.
Gold Selloff Defies Schiff’s View
Schiff, in a post on X, said traders were being “conditioned to believe that war is now bearish for gold” after the precious metal declined even as tensions between the U.S. and Iran escalated.
He added that investors betting against gold would be “in for a world of hurt” once markets recognize “that the opposite is true,” saying conditions are set for “a huge rally.”
Gold ETFs Slip Despite Rising Tensions
Spot gold slipped to $4,072.62 an ounce at the time of publication; it has fallen 5.50%, but is still 21.83% higher than a year ago.
Gold (USD/Troy Ounce) — Courtesy Trading Economics
U.S. gold futures for August delivery fell 0.94% at $4,075.70 an ounce.
The SPDR Gold Shares ETF (NYSE:GLD), which holds $188.10 billion in assets under management and charges an expense ratio of 0.40%, has fallen 5.34% so far this year and has risen 22.40% over the past year.
The iShares Gold Trust ETF (NYSE:IAU) has $61.46 billion in assets and charges an expense ratio of 0.25%. The fund has fallen 5.27% over the past year and gained 22.54% over the past 52 weeks.
The SPDR Gold MiniShares Trust (NYSE:GLDM) has $27.70 billion in assets under management and charges an expense ratio of 0.10%. It has lost 5.19% year-to-date and returned 22.74% over the past year.
The abrdn Physical Gold Shares ETF (NYSE:SGOL) and iShares Gold Trust Micro Shares (NYSE:IAUM) have lost over 5.20% year-to-date and returned over 22% over the past year.
Gold has long been regarded as a hedge against geopolitical risk, but the escalation between the U.S. and Iran has instead coincided with a selloff in the metal.
Iran Conflict Keeps Markets on Edge
The latest escalation was a fourth round of U.S. strikes against Iran in the past week after Tehran targeted a commercial vessel in the Strait of Hormuz.
Iran responded with attacks on U.S. military facilities in several Gulf countries, while U.S. Central Command said the strategic waterway remains open despite Iranian claims it had been closed.
The Strait of Hormuz carries roughly one-fifth of the world’s traded oil and natural gas, making developments around the corridor a key focus for commodity and financial markets.
Higher Oil, Rate Fears Weigh on Gold
Despite the renewed geopolitical tensions, gold remains under pressure as rising oil prices reinforced expectations that the U.S. Federal Reserve may keep interest rates higher for longer, offsetting the metal’s traditional safe-haven appeal.
Price Action: GLD closed 0.31% lower on Friday at $377.01, but reversed some of those losses to gain 0.24% in extended trading.
Benzinga edge rankings indicate GLD has a Momentum score in the 33rd percentile and a negative price trend across the short, medium and long term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Courtesy: JOURNEY STUDIO7 on Shutterstock.com
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