War: Is the drop in gold an opportunity?GOLD / U.S. DOLLARFX_IDC:XAUUSDSwissquoteGold is the preferred asset on financial markets to hedge against geopolitical risk. However, the observation is clear: gold and silver have fallen sharply on the markets since the start of military operations last Saturday, February 28. Has gold lost its status as a safe haven? Naturally, the answer is no. So why has it fallen, and should investors consider buying again? Vincent Ganne explains everything. Gold is traditionally considered the ultimate safe-haven asset during periods of geopolitical tension. Yet, since the outbreak of military operations on February 28, the situation has been surprising: gold, like silver, has recorded a significant decline on financial markets. This reaction may seem contradictory, but it does not in any way call into question gold’s fundamental safe-haven status. The chart below shows the performance of all asset classes since the start of military operations on Saturday, February 28. Gold and silver have dropped sharply. In reality, this correction is primarily explained by the market dynamics that prevailed before the conflict. For several months, gold had been in a strong upward phase, fueled by significant speculation, until reaching major technical targets. The market was therefore overheating, making a consolidation phase inevitable. The data below show that gold is the preferred financial asset in times of geopolitical stress. However, it has declined sharply over the past month because, even though the geopolitical driver is operating at full capacity, other essential bullish fundamental drivers have weakened. The outbreak of the conflict did not reignite the upward trend but instead caused a temporary shutdown of several key fundamental drivers. These include interest rates, the US dollar, flows into gold-backed ETFs, and physical demand from major consuming countries such as China and India. As long as these factors remain weak, gold may continue to move within a stabilization or consolidation phase. In this context, the market will need to wait for these drivers to reactivate before gold can build a solid bottom and resume a sustainable upward trend. Thus, although the current decline may seem worrying in the short term, it is actually part of a healthy correction. The table below provides a summary of the fundamental bullish drivers that are no longer functioning and are currently more powerful than the geopolitical bullish driver. This pullback phase can therefore be interpreted as an investment opportunity, provided a disciplined approach is adopted and clear technical signals are awaited, particularly around major support levels such as the 200-day moving average. Finally, silver presents even more attractive potential. Supported by strong industrial demand (artificial intelligence, solar energy, electric vehicles) and a structural deficit between supply and demand, it benefits from solid medium- and long-term bullish prospects. However, caution is warranted as the major support is located at $50. The chart below shows daily Japanese candlesticks for gold prices and highlights a major technical support zone between $3,400 (former inflation-adjusted all-time high) and the 200-day moving average, corresponding to a price range between $3,400 and $4,000. DISCLAIMER: This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. 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