Silver and Gold Fall as Governments Rush to Curb Iran War's Oil Price Shock

Gold and silver gave back earlier-week gains on Wednesday as markets focused on the inflationary/oil-shock channel from the new Middle East conflict, even as governments moved to blunt energy costs. Spot gold fell to ~$5153/oz (down ~1.6% on the day) and silver to ~$84.50/oz (down ~5.3%), with the transcript noting silver slipped back below the US crude oil price per barrel. The IEA announced a release of 400 million barrels from strategic reserves—more than double the 2022 Ukraine-invasion response—helping keep broader risk markets steady but not preventing renewed energy-led volatility. Natixis analyst Bernard Dahdah argues the war premium in gold has been as much as ~$750/oz, and that if the conflict ends gold could retrace toward pre-war levels around ~$4600. However, he flags that if the war drags on beyond two weeks, the inflationary impact of higher energy prices could stop gold from “going sideways,” implying renewed upside risk from stagflation fears even if the initial safe-haven bid fades. On the supply/disruption side, TD Securities’ Daniel Ghali highlights the scale of the oil-flow hit from Iran attacking tankers transiting the Strait of Hormuz (“There’s no plug for a hole this large”). The transcript also points to China’s +15.8% y/y crude import growth in Jan–Feb (refining demand plus stockpiling) as a near-term buffer, while India increased Russian purchases (~30m bbl) but faces payment-processing uncertainty as sanctions policy remains fluid. Rates and cross-asset signals were mixed: longer-end yields dipped initially in Asia, then rose in the West as energy prices rallied, with benchmark yields near 1-month highs in the US and at/near multi-year highs in parts of Europe. Near-term catalysts for PM are the durability of the IEA release impact on crude (Brent >$90 but well off the ~$120 spike), escalation/de-escalation headlines around Hormuz, and whether inflation expectations/real yields re-price higher—key for whether gold extends the pullback toward ~$4600 or re-accelerates on stagflation risk.