The U.S. has launched a war against Iran. What does that mean for gold and silver?
Of course, war, but its very nature, is unpredictable. But we do have plenty of past wars we can look at to establish historical trends. In this episode of the Midweek Memo podcast, host Mike Maharrey does just that, looking at the trajectory of the gold price during past wars. He finds that war itself has not had the significant impact on gold prices one might expect. There are other dynamics we need to consider.
In this episode, Mike also reminds listeners why they should take precious metals investment advice from the majority of mainstream financial planners or talking heads on the major networks.
Mike opens the show with a question.
“Have you noticed the mainstream media always finds a way to poo-poo gold and silver – no matter what is happening in the markets?”
He highlights a “dumb” CNBC headline he ran across on Tuesday, as the markets were in sell-off mode: “The momentum trades of 2026 are breaking with gold, silver, and South Korea down big.”
“Ummm, dude. Everything was sold off yesterday – especially in early trading. Stocks sold off. Bitcoin sold off. Even Treasuries sold off. And yes, gold and silver sold off too. I’m not sure what people were buying. Oh yeah. Oil.”
Mike emphasizes that the drop in gold and silver wasn’t the headline and that it wasn’t even particularly unusual for gold to fall along with a deep stock market dip.
“When you see big headline-generated moves in gold and silver, don’t listen to CNBC. Remember the fundamentals. These big dips are often buying opportunities.”
Mike notes that while stocks recovered most of their losses later in the day, gold did not, falling to around $5,100, the price level on Friday, Feb. 20. He says he thinks gold failed to recover because the markets are worrying about inflation.
“I think the mainstream view is that the potential for much higher oil prices will spark an inflation surge, further dampening hope for interest rate cuts.”
Mike says this underscores the general misunderstanding of what inflation is and what causes it.
“It’s not just prices going up. It is an increase in the supply of money and credit. One of the symptoms of this monetary inflation is consumer price inflation. When properly defined, inflation has been surging for months, so suddenly worrying that an oil price shock is going to cause “inflation” and now, all of a sudden, we should be worried about gold is misplaced.
“That’s not to say rising oil prices won’t have a significant impact on the economy. It could be the spark that lights the fuse of another financial crisis. Or maybe not. That remains to be seen. But the inflation problem was here before the war, and it will be here after the war. In fact, the war will probably exacerbate it because it will require more borrowing and spending.”
Mike also notes that gold is an inflation hedge. Why would you sell it if you expect inflation?
“You need to keep that in mind when the goofy CNBC guy tells you to sell gold because inflation is going to heat up. It’s not just about interest rates. And here’s the real key – I don’t care what inflation does, the Fed is going to end up further loosening monetary policy, unless you’re telling me the war with Iran is going to eliminate the debt black hole.”
Mike pivots for a moment and highlights James Madison’s warning about war, emphasizing that war has negative impacts, whether it is necessary or not. He cautions people to consider the potential unintended consequences and potential blowback.
He then tackles the central question: “With the United States now in a shooting war with Iran, how might a protracted conflict impact gold prices?”
“The historical pattern since the 1980s suggests that, beyond an initial safe-haven bump, a war alone doesn’t seem to significantly impact the trajectory of gold prices. As wars drag on, other factors tend to drive the market – particularly monetary policy.”
Mike highlights gold’s performance before and during major conflicts since the 1980s.
“While wars and rumors of wars tend to cause the gold price to spike, war momentum has faded quickly in the modern era once hostilities commence and markets get a feel for the likely trajectory of the war. At that point, other factors such as inflation expectations, interest rate policy, dollar strength/weakness, and the general state of the economy tend to have more impact on the gold market.
“This suggests it’s not so much war driving the markets, but the uncertainty that surrounds the possibility of war that sparks those initial gold rallies.
“Once war is in play, other factors step to the forefront of the markets. Depending on those factors, the price of gold can move in either direction.”
Mike points out that gold was in a bull market during the wars in Afghanistan and Iraq, but dropped after Russia invaded Ukraine because the Fed had just launched its tightening cycle to battle price inflation.
“In the modern era, the price of gold during wartime seems to be driven more by economic and monetary policy than battlefield headlines.”
Mike says that doesn’t mean gold and silver won’t respond to wartime headlines.
“We will almost certainly see increased price volatility as markets digest the latest developments. However, these price swings, while sometimes deep, tend to be short-lived. It’s clear that war alone didn’t solely drive gold’s largest wartime moves in the modern era. The biggest gains were due to a combination of war + monetary response. Since the 1980s, gold has performed best during protracted conflicts coupled with aggressive monetary easing, negative https://www.moneymetals.com/news/2025/02/17/why-inflation-and-real-interest-rates-are-bullish-for-gold-003841">real interest rates, and growing government debt.”
Mike points out that monetary easing, negative real rates, and ballooning debt are inherent in war.
“War is expensive. As James Madison reminded us, war is the parent of armies; from these proceed debts and taxes. So, yeah, war tends to drive debt higher. Central banks are often forced to drop interest rates and run https://www.moneymetals.com/news/2024/04/02/what-is-quantitative-easing-and-how-does-it-work-003092">quantitative easing programs to support government borrowing and spending during drawn-out wars. As I’ve already discussed, this is, https://www.investing.com/analysis/the-common-definition-of-inflation-is-wrong–its-just-government-propaganda-200645131">by definition, inflation.”
Mike says he doesn’t think a short war will have much impact on gold or silver; however, a protracted conflict could create a “Vietnam War scenario.”
“War spending (coupled with the War on Poverty) in the 1960s drove borrowing and spending that set the stage for the stagflationary decade of the 1970s. The underlying economy is arguably shakier now than it was then. To borrow a phrase from Pink Floyd, Iran could be just another brick in the wall.”
Mike wraps up the show, warning listeners that it’s probably not a good idea to take advice about precious metals from people who are deeply embedded in mainstream investing paradigms. To drive home this point, he highlights an interview USA Today did with a finance professor as part of a whimsical story about amateur gold prospecting.
“Leave it to USA Today to turn a fun story about gold into a diatribe about how gold isn’t really worth having.”
And what did out intreped professor say?
He claimed he didn’t think there was “ever” a good time to buy gold.
“Just think about what this guy said. He doesn’t think gold is ‘ever’ a good investment. Now go look at gold’s gains over the last two years and draw your own conclusions.”
Mike points out that there is a subtle shift happening in the mainstream, especially since Morgan Stanley CIO Michael Wilson suggested ditching the traditional 60-40 portfolio and replacing it with a 60-20-20 distribution with 20 percent allocated to precious metals. Mike notes that even a small shift toward that strategy would significantly boost gold demand.
“On average, Western investors (institutional and private) currently hold less than 1 percent of gold in their portfolios. That’s because they listen to people like Ricchiuti. Don’t do that.”
Mike closes the show with a call to action, urging listeners to get money that will hold its value over time. He suggests calling 800-800-1865 and talking with a Money Metals precious metals specialist today.
Articles Mentioned in the Show
https://www.moneymetals.com/news/2025/10/07/seismic-shift-morgan-stanley-recommends-602020-portfolio-with-20-allocated-to-gold-004389">Seismic Shift: Morgan Stanley Recommends 60/20/20 Portfolio With 20% Allocated to Gold
https://www.moneymetals.com/news/2026/02/27/a-story-about-digging-money-out-of-the-ground-and-a-dumb-finance-professor-004724">A Story About Digging Money Out of the Ground and a Dumb Finance Professor
