By Jason Laurie
Rising tensions involving Iran have pushed geopolitical risk and energy markets back into focus. That often leads to an immediate assumption that gold and silver should be surging.
That has not been the full story.
Precious metals usually respond to geopolitical stress, but the move is rarely driven by headlines alone. The bigger transmission channel is often energy. When conflict raises concerns about oil flows, inflation expectations can shift, interest-rate expectations can move and investor demand for defensive assets can strengthen. That mix matters for gold and silver far more than a single news cycle does. The Strait of Hormuz remains one of the world’s most important oil chokepoints, accounting for about 20% of global petroleum liquids consumption and roughly one quarter of globally traded maritime oil in 2025.
What is the main takeaway for gold and silver investors?
The key point is simple. Gold is acting more like a geopolitical hedge than a panic trade.
That distinction matters. Gold often performs well when markets are pricing risk methodically, especially when investors see a chance that higher energy costs could keep inflation firmer for longer. The World Gold Council says geopolitics will remain an important investment driver in 2026 and that gold’s appeal as a hedge should continue to attract demand.
Silver is part of the same story, but it behaves differently. It can benefit from safe-haven buying, yet it also trades as an industrial metal. That dual role tends to make silver more volatile than gold in both directions. The Silver Institute continues to highlight strong industrial demand as a major force in the market.
Why does oil matter more than the headlines?
When markets look at Iran, they are also looking at shipping lanes, refinery flows and the possibility of supply disruptions. The Strait of Hormuz is the central pressure point. The U.S. Energy Information Administration (EIA) says a prolonged disruption there could affect around one-fifth of global petroleum liquids consumption, while the International Energy Agency (IEA) has noted that the route is central to exports from major Gulf producers.
That is why oil often serves as a bridge between geopolitical tensions and precious metals pricing.
Higher oil prices can support gold through three channels:
- rising inflation expectations
- more uncertainty around central bank policy
- broader market volatility
When that pressure persists, gold tends to get firmer support. This relationship also helps explain why gold does not always spike on the first geopolitical shock. Investors may wait to see whether the event changes the inflation and rates outlook in a lasting way.
Has the IEA tried to calm the oil market?
Recent reporting indicates that emergency oil-stock discussions moved quickly as energy markets reacted to the conflict. Reuters reported on March 11 that the International Energy Agency agreed to release 400 million barrels of oil, with support from member countries, to ease the supply shock and cool crude prices.
For precious metals, that matters because efforts to cool oil can also reduce the odds that an energy spike feeds directly into broader inflation pressure. If the oil market stabilizes, gold may still hold its geopolitical bid, but one of its biggest macro tailwinds can soften.
Why does gold still have structural support?
Even when the immediate geopolitical reaction is muted, gold still has a strong underlying base of demand.
Central banks remain an important part of that story. The World Gold Council says central bank demand stayed durable through 2025, with net central bank demand rising to 230 tonnes in the fourth quarter of 2025. Its reserve survey also found that gold continues to play an important role in reserve management during periods of uncertainty. The European Central Bank has likewise noted gold’s value for diversification and for managing geopolitical risk.
That matters because structural official-sector buying can help support gold prices even when rates are elevated or short-term market sentiment shifts.
Why is silver usually more volatile than gold?
Silver sits in two markets at once.
It is a precious metal and a store of value, but it is also an industrial input used across manufacturing, electronics and energy-related applications. The Silver Institute says industrial demand remains a key driver of the silver market and its 2025 survey points to another sizable market deficit with industrial usage at record levels.
That dual identity helps explain why silver can move more sharply than gold. If investors want safe-haven exposure, silver may rise with gold. If markets begin to worry about weaker growth or softer industrial demand, silver can come under pressure more quickly.
What are markets watching next?
Markets are now watching the next layer of consequences, not just the initial conflict.
The biggest questions are whether oil shipments through the Strait of Hormuz remain stable, whether the International Energy Agency release meaningfully offsets supply pressure, whether higher energy costs begin to shift inflation and interest-rate expectations and whether investors continue to add to gold as a hedge against persistent geopolitical risk.
That is the framework that matters most. For precious metals, the issue is not only that conflict exists. It is whether conflict changes the macro backdrop in a way that lasts.
What does this mean for Dillon Gage clients?
For dealers, institutions and other market participants, this is the kind of environment where access, liquidity and execution matter. Dillon Gage has built its business around wholesale precious metals trading, refining, minting and storage, serving dealers, financial institutions, banks and brokerage houses worldwide. As an authorized purchaser from the U.S. Mint and major sovereign mints, the company supports the market through metal sourcing, production capabilities and real-time physical metals trading through FizTrade. For clients seeking secure storage solutions, International Depository Services Group provides fully segregated and insured vaulting for precious metals.
How Oil, Inflation and Risk Are Driving Precious Metals
Gold and silver are not reacting to Iran-related tension in a vacuum. They are responding through oil, inflation expectations and the broader path of economic risk.
Gold continues to behave like a geopolitical hedge. Silver remains tied to both investor sentiment and industrial demand. If energy disruption proves temporary, precious metals may stay supported without breaking sharply higher. If the oil shock lasts and inflation expectations climb, the case for stronger support in gold and potentially more volatile moves in silver becomes much clearer.
This market commentary is for informational purposes only and should not be considered investment advice.
About the Source
Jason Laurie, Business Development Manager, North America for Dillon Gage Metals