Geopolitical tensions in the Middle East are providing new tailwinds for the gold price, according to the French bank Natixis. In a precious metals report published last week, analysts argue that an escalation of the conflict between the US government and Iran could trigger a significant safe-haven impulse in the short term. Based on historical conflict patterns, it is estimated that the gold price could rise by around 15% in the event of an escalation—with a large part of the movement likely to occur very early on.
Natixis explicitly places the market reaction within a short-term window: in its estimation, the strongest price increases would take place in the first one to two weeks after the start of a possible military action. With a sideways-trending baseline, Natixis sees a range of $5,500 to $5,800 per ounce of gold within two weeks of an attack in this scenario.
Natixis: Safe-Haven Demand Could Initially Drive Gold Prices Quickly
For the experts, the mechanism is clear: rising geopolitical uncertainty typically increases demand for “safe havens,” from which the gold price often benefits immediately. Natixis emphasizes that such movements usually do not proceed steadily but start as a rapid jump—and only then transition into a phase of reassessment. The argument is that the market needs time after the initial shock reaction to categorize the economic and political implications.
In this context, analysts point out that the gold price has already been trending firmer since the beginning of the month—parallel to tougher rhetoric from US President Donald Trump toward Iran. Last week, geopolitical uncertainty already pushed the gold price above $5,000 per ounce. Nevertheless, the market has so far failed to maintain gains above $5,200, even though prices remained supported at an elevated level.
At the time of the cited assessment, spot gold was last trading at $5,147.20 per ounce. From the perspective of Natixis, the figures underscore the image of a market that has priced in a geopolitical premium but is currently remaining in a kind of “holding zone.”
Why the Gold Price Does Not Automatically Continue Despite Record Proximity
As clearly as Natixis describes the short-term upside potential in the event of an escalation, the warning regarding a lack of sustainability is equally clear. The bank points out that safe-haven demand can be “extremely volatile” and rarely leads to permanently higher price levels. Gains are often surrendered as soon as a conflict stabilizes—even if the confrontation lasts longer. The decisive factor is less the duration of the conflict than the question of whether markets can better assess the consequences.
This view fits the pattern outlined by Natixis: a rapid price jump in the early phase, followed by a retracement as soon as uncertainty decreases or at least becomes more predictable. For the gold price, according to the bank’s logic, this means: the short-term upside can be large, but the path there is volatile—and the way back can happen just as quickly.
This brings a second level into focus: it is not just the escalation that counts, but also the expected reaction of political actors. Natixis explicitly links the market observation to an assumption regarding the likely course of action by the US government.
Scenario Analysis: Limited Action, Approximately One Month Crisis Duration
In the event of an escalation, Natixis does not expect an unlimited military engagement, but rather a limited action. The bank assumes that the Trump administration could follow a “newly established playbook” that points to limited measures. In this base scenario, Natixis estimates the potential crisis in the Middle East to last around one month.
The French analysts justify this assessment by stating that the US government might be more inclined to target leaders while the regime structures and security apparatus remain fundamentally intact. Venezuela is cited as an analogy. Natixis distinguishes this approach from a strategy aimed at comprehensive regime change and institutional reorganization—an approach that experts link to the Bush era and the examples of Iraq and Afghanistan, where regime and military structures were dismantled.
From the Natixis perspective, this scenario assumption is important for the gold price because the expected duration and intensity of the conflict help determine how long safe-haven premiums remain in the market. The report thus paints a picture in which geopolitical risks could favor new all-time highs in the short term—while at the same time, these very risks form the basis for particularly volatile price formation.
