International oil prices have surged by approximately 34.5% in the past week, while gold has only edged up by a modest 2.3%. This disparity has sparked widespread attention in the market. Traditionally, gold is considered a safe-haven asset during geopolitical turmoil, but this time it has not rebounded as strongly as expected. Analyst Shanaka Anslem Perera points out that this phenomenon stems from the multiple interconnected effects of rising oil prices: crude oil is priced in U.S. dollars, and soaring oil prices drive up demand for the dollar, which in turn puts pressure on gold. At the same time, market expectations of rising inflation are also prompting expectations of tighter Federal Reserve policies, further suppressing the attractiveness of non-yielding asset gold.
This conflicting force constitutes a typical pattern of the "first phase of an oil shock" – oil prices react quickly to supply risks, while gold remains cautious until inflationary pressures truly penetrate the real economy. Historical experience shows that a true gold bull market often appears with a lag. Taking the 1973 oil embargo as an example, oil prices quadrupled in the early stages of the crisis, but gold only rose by a small 6%; the real breakout occurred 12 months later, when global inflation was deeply entrenched, and gold prices soared by 73%. In contrast, the 1990 Gulf War was short-lived, and the market recovered quickly, so gold's reaction was relatively limited.
The current situation focuses on shipping risks in the Strait of Hormuz, which handles nearly one-third of the world's seaborne oil transportation. As insurance companies reassess regional risks, some oil tanker traffic has slowed. Insurance underwriting decisions are based on long-term risk models, not short-term political events, which means that if the risk persists, supply disruptions could extend to 60 days or more. Oil prices currently reflect the supply shock, but gold prices still suggest that the market expects this to be a short-term disruption. If the conflict continues to push up inflation expectations, gold may usher in a key turning point.