Joe Cavatoni's Bull Case in Gold & Jewelry as U.S.-Iran Tensions Persist

Gold prices have corrected from their 2026 highs near $5,400 an ounce, settling around $4,600 amid geopolitical uncertainty, sticky inflation, and shifting central bank policies. Joe Cavatoni of the World Gold Council argues that while short-term volatility is driven by speculative momentum and rate expectations, gold remains a strategic global store of value—especially as inflation outpaces wage growth and risk assets face pressure. Despite a downward trend in jewelry tonnage, spending remains strong due to record prices and increased recycling, particularly in emerging markets. A major shift is underway: investors are moving from jewelry to bar and coin, with record demand in China, India, and Europe. Meanwhile, silver struggles due to industrial demand sensitivity and trade policy uncertainty, with investment taking a backseat. Central banks remain the dominant marginal buyers, accumulating 244 tons in Q1 alone, while Western and Eastern investors react tactically to geopolitical flare-ups and rate shifts. The real story isn't just gold’s price—it’s a structural repositioning of demand. As geopolitical tensions persist in the Middle East and inflation lingers, gold’s role as a long-term hedge is being reinforced, even if its near-term moves are reactive. The market is no longer just about inflation or war fears; it’s about strategic asset allocation, with central banks and savvy investors using gold not just as a safe haven, but as a tool to hedge against systemic risks in a fragmented global economy.