Gold didn't react to the Iran conflict the way most people expected — and that confusion caused some investors to sell at exactly the wrong time. In this video, I explain the two opposing forces acting on gold right now, why it's still absolutely a safe haven, and why I've been using this dip to increase my own holdings.

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Gold usually appreciates during a war or a conflict, but with the bombing of

Iran, it didn't appreciate as expected, which is exactly why you need to be aware

of this pattern I'm about to reveal, which not too many people know about.

Welcome to the Invest Like a Pro podcast, teaching you diversified,

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And now your host, former JP Morgan, investment manager, Manish Kataria.

Gold didn't fail as a safe haven.

In fact, it moved exactly as it should have done.

Because some people misunderstood gold's move, it made them sell

at quite possibly the wrong time.

But it was crystal clear to me what was happening, and that was the reason

I was buying more gold on the dip.

You see, gold wasn't just reacting to a war.

It was being pulled in two opposite directions.

And once you understand this, you'll know why I've been increasing my own holdings.

Hi, I'm Manish Kataria.

I'm a professional investment manager and I've been investing in gold and stocks and

ETFs and options for more than 20 years.

Now for those people who are selling gold's move may not have made any sense.

Remember, we had an escalating conflict in the Middle East.

We had rising tensions and we had a real threat to the global economy.

And usually that's the kind of environment where gold thrives.

When uncertainty and fear rises, gold usually becomes the classic safe

haven asset, but this time it didn't.

So what's going on?

You see, right now gold is in a tug of wall.

On the one side, there's a positive force pulling gold higher.

That's the safe haven status from fear.

But on the other side, there's an opposing and temporary force pulling it down,

and when we understand both sides of that gold's price action becomes clear

and logical.

So let's start with the first force, the one that most people already understand.

Gold as a safe haven.

Anytime uncertainty rises.

Gold tends to appreciate when stocks have a wobble, including when there's a

war or a pandemic or some other crisis.

Investors naturally look for places to protect their wealth.

We had the.com bubble in the late, um, 1990s, the global

financial crisis in 2008, 2009.

We had the COVID crash in 2020 and Russia invading Ukraine in 2022.

Anytime stocks had a temporary wobble, you'll remember, and you'll have seen

that gold appreciated as a safe haven.

And it's not just recently, gold has played that role for thousands of years.

Why?

Because gold is not owned, or it's not dependent on any one

government or any one country.

So during times of stress demand for gold increases.

That's exactly what is happening right now.

It is happening right now, but the thing is, it's only half the story.

And the second force is the one that's being misunderstood.

That's interest rates or more specifically bond yields, which are rising right

now because of higher oil prices.

And here's the critical idea you see gold doesn't produce income, right?

It doesn't pay interest, it doesn't pay dividends.

So when interest rates are rising, that makes people sell gold

to earn more interest because now you have an alternative.

Now holding cash or bonds could generate a higher return than before,

And that creates what we call a higher opportunity cost to own gold.

In simple terms, every pound you have in gold is a pound that isn't

earning those higher interest rates.

So.

Higher oil prices threaten inflation, which means higher expected interest

rates, which means some people will have moved from gold to higher yielding cash,

and that's the force that was pulling gold down, and that's always been the case.

There's nothing new there.

Anytime bond yields or interest rates go up, gold will react negatively

because of that higher opportunity cost.

So what we are seeing is this tug of war being played out in real time.

On the one side, you've got fear and uncertainty, and that safe haven demand

pushing gold up on the other side, you've got rising rates and rising

inflationary fears, which is a higher opportunity cost pulling gold down.

And during the Middle East tensions, the Second Force was offsetting the

first one, which is why gold wasn't behaving the way people had expected.

IE just the first force.

But most importantly, this doesn't mean that gold is no longer a safe haven.

It absolutely is, and it always will be, and it's working exactly

as it should, but the down factor is temporarily outweighing the up factor.

And you see, that's the misunderstanding that creates this opportunity in my

view, which is exactly why I use this weakness to increase my own holdings in

gold, not because the Safe Haven story has changed, but because it never did.

Yes, gold is still a safe haven asset that hasn't changed.

It was just influenced by another force, a news flow driven

temporary force, in my opinion.

And this is where informed investors can position themselves

correctly instead of reacting to news flow and short term moves.

So instead of asking why isn't gold going up, a better question might be,

what forces are acting on gold right now and how do I use that to my advantage?

Because once you see it that way, you'll start investing with complete clarity.

If you found this useful, get your free explainer guide on

how to invest in gold properly

and safely.

And did you know, by owning gold, you can also earn income on it through options.

So learn more by downloading your free explainer guide.

Find the link below and uh, maybe I'll see you on the next video.