Gold and silver hinted at an attack on Iran on Friday

The prices of gold and silver on Friday, February 27, hinted at the American-Israeli attack on Iran that occurred just a day later. The price of gold climbed to $5,278 per ounce, rising 2 percent within a single trading day on the American stock exchange, while the price of silver reached $93.7 per ounce, an increase of as much as 7.6 percent also within a 24-hour interval.

A strong jump in the price of gold and silver is expected on Monday

The attack by the U.S. and Israel on Iran set off all alarms in global markets, and the very anticipation of this event a day earlier led to a sharp increase in the prices of gold and silver. The prices of gold and silver often serve as a litmus test and an important indicator of global market risk precisely because of their role as a store of value in times of rising uncertainties and crises.

Many are now asking: what will happen to the price on Monday when the stock exchanges reopen for trading? Analysts predict a so-called gap-up opening, meaning that the prices of gold and silver could immediately jump to even higher levels compared to Friday’s close. Estimates suggest that gold could test levels of $5,300 to $5,350 per ounce, while silver could reach between $95 and $98 per ounce.

The further development of the situation will depend on the potential escalation of the conflict in the Middle East, which already resembles the prelude to a broader regional conflict, as well as the implications of that conflict for oil prices, inflation rates, and the overall global economy.

Major players are leaving the risky dollar, massively buying gold

The attack by the U.S. and Iran has shaken the global market, but this time the capital’s reaction carries a specific sign that changes the existing rules of the game. The key change is that the U.S. dollar is no longer considered a safe haven, but rather an exposure to additional risk.

The biggest problem in this conflict is the possible closure of the Strait of Hormuz, through which 25 percent of the world’s oil passes, which would represent an unprecedented shock to the global economy and trigger a collapse of confidence in the U.S. dollar.

The recent escalation is also much riskier than the previous U.S. intervention in Venezuela. China, as America’s main rival, remained restrained regarding the blockade of Venezuelan oil at that time, but a potential blockade of Iranian oil exports could be the turning point that forces Beijing to react.

Instead of military conflict, China could choose to massively sell U.S. Treasury bonds and further shake the system by limiting the export of silver and rare metals. Such moves could introduce chaos into American supply chains and cause greater damage to the U.S. economy and the dollar than any conventional war.

The trend of moving away from the dollar as a risky asset is best illustrated by the moves of those who dictate the global pace, namely central banks. Their systematic distancing from the dollar and massive purchases of gold show a clear strategic direction. Physical assets without third-party risk, such as gold, are becoming the only true foundation of economic security.

The world’s strongest investment banks are also tracking this flight from paper money to gold, while simultaneously predicting a deepening of global uncertainties. Consequently, their forecasts that the price of gold will eventually reach $6,300 by the end of the year could materialize significantly ahead of schedule.