Gold and silver’s historic rally could resume ‘as fog of war lifts’

The rally that propelled gold and silver to record-breaking highs in 2025 could pick up again if a U.S.-Iran peace deal is reached, market watchers told CNBC as prices ticked higher on Thursday.

Spot gold jumped 1.2% to $4,750 per ounce early on Thursday, amid hopes that the U.S. and Iran could be nearing a deal to bring the 69-day war to an end.

U.S. gold futures were up 1.2% to settle around $4,750.00.

Meanwhile, spot silver added 3% to trade at $79.62 an ounce, and silver futures for July delivery jumped 3.9%.

Gold and silver both enjoyed record-smashing rallies in 2025, surging 66% and 135%, respectively, over the course of the year. However, they have seen much more volatile trade in 2026, with silver futures suffering their biggest single-day blow since the 1980s at the end of January and gold knocking more 10% off its January peak.

Since the outbreak of the U.S.-Iran war on Feb. 28, gold’s reputation as a “safe haven” asset in times of turmoil has come under pressure as some of the drivers behind its ascendance have been called into question.

The potential for higher interest rates, a stronger U.S. dollar resulting from a surge in oil prices, and traders exiting positions all contributed to its recent decline, particularly as the yellow metal entered the conflict “significantly overbought”, according to Ross Norman, CEO of precious metals website Metals Daily.

This gave dealers a reason to take profit and for the market to consolidate as traders sold up their best-performing asset, he told CNBC.

Francis Tan, chief Asia strategist at Indosuez Wealth Management, described this property as “pretty useful” during March’s market tumult in an interview with CNBC on Tuesday.

“If you look at March, when equities were selling, for an investor with some allocation in gold during that period, you were sitting on pretty strong returns in gold, and you could perhaps take some off the table to cover some of your equity losses.

“So gold as a safe haven certainly has played its part.”

During the course of the conflict, gold traded inversely to both oil prices and the U.S. dollar.

“The dollar and gold both rallied, the former seeing hot money flows as energy supplies choked, while the dollar gained on safe haven flows,” Norman added. “A peace deal would suggest those tailwinds ease off and we are seeing that just now. It’s as if the handbrake has been released from gold and silver.”

Philippe Gijsels, chief strategy officer at BNP Paribas Fortis, has long held a bullish view on gold and silver, and his belief that more upside lies ahead for the metals has not wavered even as volatility continues to grip precious metal markets.

He told CNBC on Thursday that he saw the downturn in gold and silver prices as a “consolidation phase.”

“This time around, precious metals have shown a strong correlation with equities. Both were mostly hurt by fears inflation would drive up interest rates,” Gijsels said. “In our world interest rates are like gravity. When interest rates rise, gravity increases and all assets are pulled down, including precious metals.”

As the Iran war dragged on – prompting warnings of price shocks and economic growth stunting – markets rushed to price in a suspension of monetary easing cycles in various major economies, with some central banks now expected to hike interest rates to ward off the impact of inflated energy prices.

But optimism resurfaced on Wednesday following reports that the U.S. and Iran are close to agreeing a peace settlement. Gijsels noted that precious metals were now recovering with equities.

“We expect the secular bull market in gold and silver to resume and the metals to reach new all-time highs in the not too distant future, potentially this year,” he told CNBC.

Gijsels said on Thursday that all the elements that have brought gold and silver this far “are still very much in place.”

“Central banks and governments will continue to diversify away from U.S. government paper into gold,” he told CNBC. “As we live in an environment of structurally higher inflation one needs to hold real assets. Precious metals are clearly part of this. [And] as the fog of war lifts, investors will come back into the market for gold and silver.”

The decline in gold and silver prices in recent months, he argued, was “not the end, but merely a pause in what will live up to be the strongest and longest bull market in gold and silver in history.”

Paul Williams, managing director of gold and silver supplier Solomon Global, told CNBC in an email on Thursday that it was difficult to make predictions with the war still ongoing, particularly for the more volatile silver. But, like Gijsels, he said silver prices were still underpinned by the same fundamental drivers that fueled the 2025 rally.

“Supply of physical silver remains tight, while strong demand from green technologies continues,” he said. “The U.S.-Iran conflict has only underscored the strategic case for solar power. AI-related demand remains significant and is growing, adding further pressure to an already stretched supply/demand balance.”

Silver is used for a wide range of industrial purposes, and is an essential component in goods from computers and mobile phones to solar panels and cars. While Williams said short-term volatility was likely to persist until a durable agreement between the U.S. and Iran is formalized, he said prices should be supported in the longer term.

“I expect we can see further upside and bullish conditions as more people seek the safety and reassurance of being able to hold a physical asset outside of the traditional financial system,” he said.

“If a peace deal is signed, silver would most likely benefit from improved economic sentiment, stronger industrial demand, and greater investor risk appetite. If talks fail, gold would probably lead the initial safe-haven move, but silver’s tighter physical market means it could catch up very quickly.”