Despite gold’s reputation as a safe-haven asset, its price has plunged since the outbreak of the Middle East war, erasing almost all its 2026 gains after reaching record highs, AFP reports.

Gold is trading at around $4,550 an ounce, after reaching highs above $5,500 earlier in the year on mounting geopolitical tensions.

Uncertainty around the Middle East conflict has prompted investors to rapidly sell off assets to raise cash and offset losses elsewhere.

They have turned first to selling gold, “given the size of the rally seen over the course of the past year”, said Joshua Mahony, chief market analyst at Scope Markets.

By liquidating gold and sister metal silver, investors gain access to dollars — the currency used to trade oil and other energy products.

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