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The gold price was on the rise this week, breaking briefly through the US$4,800 per ounce level for the first time since mid-March before pulling back.

Silver trended upward as well, nearly hitting US$77.50 per ounce.

Both precious metals have seen price declines since the Iran war began, and were boosted this week by US President Donald Trump's announcement of a two week ceasefire.

I've been seeing a lot of questions about why gold and silver prices have gone lower, not higher, since the war broke out, and I think it's definitely a topic we should continue examining.

I heard recently from Dr. Mark Thornton of the Mises Institute, who said the decline in gold happened because the yellow metal is doing its job. Here's how he explained it:

"There's a small subset of market participants who are going to want to sell gold at the outbreak of the war, not buy gold. And so people in the Persian Gulf, in the Levant, Syria, Israel, Palestine, Jordan, the Gulf states, we would expect them to be selling gold to finance their governments, or to finance their businesses or to raise cash and get the heck out of there. So in terms of emergency, while we're all anticipating in the long run that the price of gold is going up — and I believe it will — in the short run, those people exited the industry, causing even further downturn in the price of gold.

"So gold proved to be what it's advertised to be: a hedge against risk and troubled times and all of that. We just have to pay attention to who is facing the greatest risk and what they're going to do about it."

What does that mean for gold and silver prices moving forward? The broad consensus among the experts I've been speaking to is that the bull run isn't over.

And interestingly, some central banks seem to be taking advantage of the pullback, with Chinese gold reserves last month recording their biggest rise since February 2025.

But given the global geopolitical uncertainty, it's tough to know when prices will ramp up again.

At the time of this writing, the ceasefire was on rocky ground, with Israel continuing to attack Lebanon, and the Strait of Hormuz still essentially closed.

Oil prices remain volatile, and although they took a hit when the ceasefire was announced, the long-term impact of the strait's closure is expected to be meaningful.

One beneficiary so far has been Russia, with calculations from Reuters showing that its oil tax revenue is set to double in April as demand for Russian oil grows.

I spoke to Dr. Marc Faber of the Gloom, Boom & Doom Report, who said while he's not particularly interested in buying stocks right now, oil companies do have some appeal: "If I have to buy stocks, I would buy some oil stocks, but I think I would also buy some mining companies. Although I think that the mining stocks are not acting well, that they will go down first."

Faber is a frequently requested guest, and I was excited to speak to him for the first time. Gold was of course another topic he covered, and while he thinks it could go lower, the context is key — he anticipates a broader decline in asset prices, with gold likely faring better than most:

"I don't think I'm a gold bug, but in my asset allocation — I've written about this for the last 40 years — I have about 25 percent of my assets in gold and 25 percent in real estate, and 25 percent in stocks and about 25 percent in bonds and cash.

"I feel the most comfortable with gold, but I want to stress here that I don't think that gold will necessarily go up in an environment of tightening liquidity. But it may go down less than other items, and it may be relatively safe."

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

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