• Gold prices have dropped about 12% since late February despite geopolitical tensions

• Rising oil prices are fueling inflation fears and expectations of higher U.S. interest rates

• Higher yields and a strong dollar are reducing gold’s appeal as a safe-haven asset

Gold prices opened the week lower on April 6, falling to $4,600 per ounce on global markets, down about 12% since late February. The decline contrasts with the strong rally seen a year earlier, despite a similarly tense geopolitical backdrop now marked by the ongoing conflict involving Iran.

In 2025, gold fully benefited from its safe-haven status, attracting investors seeking protection against U.S.-China trade tensions and the war in Ukraine. Strong demand pushed prices to record levels, with 53 all-time highs recorded over the year and annual gains exceeding 60%.

This time, however, persistent geopolitical tensions—particularly involving the United States and Israel on one side and Iran on the other—are having the opposite effect. The main driver is the surge in oil prices, caused by supply disruptions, which is reviving inflation concerns and strengthening expectations of higher interest rates in the United States.

While gold is traditionally seen as a hedge against inflation, rising interest rates tend to reduce its appeal, as investors shift toward higher-yielding assets such as bonds. This dynamic is reinforced by strong U.S. macroeconomic indicators, which are supporting both Treasury yields and the dollar.

“Gold slid toward $4,600 per ounce on Monday, extending losses from the prior session after President Donald Trump issued a fresh ultimatum to Iran […]. Gold remains down roughly 12% since the conflict began, as surging energy prices fueled inflation concerns and strengthened expectations of interest rate hikes. The metal has also struggled to perform its traditional safe-haven role, pressured by forced liquidations as investors moved to cover losses in other markets,” Trading Economics said.

In this context, short- and medium-term outlooks remain uncertain. Before tensions escalated in Iran, institutions such as UBS and JP Morgan were still expecting prices to continue rising, with the potential to exceed $6,000 per ounce by the end of the year. Those forecasts were based on sustained investor and central bank demand amid geopolitical uncertainty.

The coming months will be key in determining whether this trend continues, along with its implications for African economies that depend on gold revenues. Countries such as Burkina Faso, Mali, Ghana, and Côte d’Ivoire benefited from higher prices in 2025, while also introducing new tax reforms to capture a greater share of the gains.

Aurel Sèdjro Houenou