The Iran conflict continues to roil global markets, but gold isn't shining as brightly right now, despite the fact that it has long been seen as a safe haven during times of crisis.
Gold prices dropped by 4% to $5,124 per ounce as of publication, attributed to the strong US dollar, according to experts."The dollar is absolutely roaring away, as are U.S. Treasuries, and that's providing a strong headwind to gold and particularly silver," said independent analyst Ross Norman in an interview with Bloomberg.
Commodities such as gold and oil are valued in US dollars since they are the most extensively used currency and are associated with the world's most powerful economy.This means that a stronger US dollar will often lower the price of these goods because it costs fewer dollars to purchase them.
"One of the issues with gold right now is that it has had such a run recently, and speculation has reached a fever pitch," says Colin White, CEO of Verecan Capital Management.
"It is more delicate at the moment. So it kind of contradicts, 'It's always a safe haven' — nothing's ever the same."
The Iran conflict's impact on the global economy
On Saturday, the United States and Israel began strikes against Iran, igniting a new crisis in the already tense and turbulent Middle East.Concerns about how long this dispute will go and if it will escalate are two possible reasons why investment analysts believe the US dollar is becoming more tempting right now.
"When the world gets really, really, really scary, the USD [U.S. dollar] appears to carry the day, right? "And that's for no other reason than the USD," argues White.
"The entire world trades on confidence, correct? So money flows where there is confidence. And when there is no other source of confidence, the worldwide vote goes to USD, and I believe that is happening again this time."

This suggests that the US dollar may currently be regarded as a greater asset than gold, reflecting investors' trust in the US in the midst of the Iran war.
At the same time, major markets, including Wall Street, fell down at the opening of trading on Tuesday.
Iran conducted counter-attacks on US military installations, embassies in allied countries such as Saudi Arabia, and neighboring oil and gas sites.Iran also effectively closed the Strait of Hormuz, a critical maritime route that transports one-fifth of the world's oil, by threatening any ships that attempted to pass through it.The longer the fight lasts, the greater the risk to the world's oil supply, and when there is less oil available, prices rise.
US President Donald Trump stated on Monday that the fight may last four to five weeks or longer.
A barrel of crude oil was trading around $74 as of writing, up nearly 20% from less than $64 last Thursday.
Although a stronger US dollar could contribute to lower oil prices, supply concerns outweigh any potential discounts.Then there's the risk of inflation, which comes with increasing oil costs.
Prices for products and services rise over time, a phenomenon known as inflation. Higher oil prices often result in more expensive gasoline, including for automobiles, trucks, cargo ships, airlines, and other modes of transportation.
Businesses will typically pass on these additional expenses to consumers, driving rising inflation.
"It is certainly impactful to what you're going to be paying at the grocery store, when you go to the mall, the retail outlets, much of the economy survives on diesel, and diesel fuel prices are certainly jumping much more considerably," according to Patrick De Haan, a GasBuddy petroleum expert.Gold prices are also declining due to concerns about rising inflation.
If inflation rises, particularly in the United States, central banks such as the Federal Reserve may be required to boost interest rates to keep prices from rising too quickly.
However, higher borrowing costs tend to attract more foreign investment and raise the value of the local currency, therefore the US dollar will rise as well.
This is why gold prices are currently falling: anticipation of increased interest rates in the United States are linked to inflation risk from rising oil costs, as the Iran conflict raises worry that supplies will run out soon.

"People are trying to find a direction and there's a lot of uncertainty and markets hate uncertainty," according to White.
"There are different parts of the market that are very optimistic going into this." Other places where people were pessimistic before this. So all of this is contributing to the current shift in attitudes and expectations. And it's happening in real time, which is terrifying, and when people are terrified, they make other decisions."