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Gold prices have declined significantly since the outbreak of the war in Iran. However, any clear signs of de-escalation are likely to trigger a sharp rebound, potentially driving prices to new record highs, according to the CEO of one of the world’s largest independent financial advisory organisations.
Nigel Green from deVere Group commented on gold’s recent downturn, as it has experienced one of its sharpest short-term sell-offs in years, dropping to around $4,600 an ounce, which is more than a 10% decline from its recent highs above $5,500.
He said, “Prices have come off sharply from recent highs as energy markets push inflation expectations higher and delay the path to interest rate cuts. Gold, being a non-yielding asset, is reacting to this shift in the short term.”
However, Nigel Green also points to what he describes as relentless sovereign demand that will underpin the next upward move. Central banks have purchased over 1,000 tonnes of gold annually for three consecutive years, including approximately 1,045 tonnes in 2025, marking the strongest sustained accumulation since the 1960s.
“Central banks, including the People’s Bank of China and the National Bank of Poland, have been buying at a pace we have not witnessed in decades. This is long-term strategic allocation on a global scale.”
Reports indicate that more than 20 central banks increased their gold holdings over the past year, reinforcing a broad and coordinated shift in reserve strategy. Emerging economies, in particular, are building gold positions to reduce reliance on the dollar and strengthen financial resilience, Green noted.
“De-dollarisation is gradually occurring through reserve diversification. Gold is central to this process because it carries no counterparty risk and no political conditions.”
Survey data reveals that around three-quarters of central banks expect gold to account for a larger share of reserves over the next five years, highlighting how entrenched this trend has become.
Nigel Green stated, “The dollar remains dominant, but its share is edging lower, while gold’s share is rising. This rebalancing is one of the defining trends in global finance.”
He argues that this dynamic is creating a strong structural support for the market, even as geopolitical pressures weigh on prices in the short term. “Before the Iran war, central banks were accumulating and holding gold. We expect this to resume as soon as there are legitimate signs of de-escalation. This will remove supply from the market and strengthen long-term support.”
Institutional and private demand is also on the rise. Analysts expect combined central bank and investor demand to average around 585 tonnes per quarter through 2026, reinforcing the market’s underlying strength.
Nigel Green commented, “There is a significant backlog of demand from sovereign and institutional buyers. As soon as macro pressures ease, that demand will quickly reassert itself.”
He added, “Gold has already surged to record levels above $5,000 in recent months. Fundamentals, not speculation, have driven this rally, and those fundamentals remain intact.”
Green cautioned against misinterpreting the current pullback. “Short-term weakness linked to geopolitical tension and inflation expectations doesn’t change the overall trajectory. It reflects market positioning, not the direction.”
He continued, “As tensions related to Iran begin to ease and markets stabilise, capital will rotate back into gold rapidly. The scale of central bank buying means the upside move could be sharp.”
Gold’s performance since the outbreak of the Iran war closely resembles what occurred in 2022 following Russia’s invasion of Ukraine. That conflict triggered a major energy shock that affected global markets and pushed inflation higher.
“Bullion then entered a prolonged period of decline, falling for seven consecutive months through October, marking the longest losing streak on record. The same macro forces are now back in play.”
Nigel Green concluded, “Fresh all-time highs are well within reach in the near term. The structural drivers are stronger now than at any point in decades. Many emerging countries are rebuilding their reserves, with gold at the centre of their strategies. As reliance on the dollar gradually declines and geopolitical uncertainty remains elevated, gold’s importance only increases.
“Once the immediate geopolitical pressures in the Middle East fade, the next move higher is likely to be bullish, rapid, and decisive for gold prices.”
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