Gold often soars during crises. Not this time — so what’s going on?

The Iran conflict continues to roil global markets but gold isn't shining so brightly right now, even though many have long considered it a safe haven during a crisis.

The Iran war continues to roil global markets, but gold isn’t shining so brightly right now even though many have long considered it a safe haven during a crisis.

Gold prices fell about four per cent on Tuesday to roughly $5,124 an ounce as of publication, and some experts say this dip is because of strength in the U.S. dollar.

“The dollar is absolutely roaring away, as are U.S. Treasuries, and that’s providing a strong headwind to gold and particularly silver,” said independent analyst Ross Norman in an interview with Reuters.

Commodities like gold and oil are priced in U.S. dollars because it is considered the most widely-used currency and tied to the world’s most powerful economy.

This means a stronger U.S. dollar will usually drive down the price of these commodities because it takes fewer dollars to buy them.

“One of the issues with gold right now is it had such a run recently and the speculation has reached a fever pitch,” says Colin White, CEO of Verecan Capital Management.

“It’s more fragile right now at this moment in time. So that’s what kind of goes in the face of, ‘It’s always a safe haven’ — nothing’s always anything.”

On Saturday, the U.S. and Israel launched strikes on Iran and sparked a new conflict in the already tense and volatile Middle East region.