Gold’s traditional relationship with geopolitical conflicts is changing, with inflation, interest rates and monetary policy emerging more important drivers of bullion prices, according to a report.
In its H1 2026 Precious Metals Report, Motilal Oswal Financial Services Ltd (MOFSL) said the first half of the year showed that geopolitical risks alone may not be enough to sustain a gold rally as investors increasingly assessed conflicts through their impact on inflation and interest rates.
“H1 2026 demonstrated that the relationship between war and gold has become increasingly conditional,” Navneet Damani, Head of Research, Commodities at MOFSL, said.
Markets increasingly focused less on the geopolitical headlines themselves and more on their impact on inflation, real interest rates and monetary policy expectations, he added.
“Rising bond yields emerged as the key headwind for gold, outweighing traditional safe-haven demand despite elevated geopolitical tensions,” Damani said.
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