Gold crashes from $5,500 to $4,160 since the Iran conflict began, but experts see a massive buying opportunity

Since the fighting began in late February, gold has experienced a volatile downtrend, falling from roughly $5,274/oz to roughly $4,160/oz by late July. Likely, yellow metal investors never saw the decline coming, especially since gold prices reached an all-time high of $5,500 in January 2026. Since then, it's been all downhill as gold's price fell by more than 20% due to a bruising combination of volatile geopolitical tension and a robust U.S. dollar.

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On the upside, gold's year-to-year price performance is up 20%, which slightly outpaces the 19% returned by the Standard & Poor's 500 stock index, which suggests gold will rebound once its main thorn — the U.S.-Iran conflict — is removed.

Until then, gold bugs primarily have two options — sit the slide out until the Iran affair disappears or buy gold cheap on the dip. Here's a closer look at why gold is down right now, but should rise again if you don't mind waiting.

It's not only the Iran issue that's keeping gold down. Just like the stock market, buy and sell cycles can have a major impact on sector prices, and that's what investors have seen over the past several months.

"The selling reports got blown out of proportion," David Han, founder of AIStockWire.com, told Moneywise. "Turkey sold 60 tons in March that made headlines, and for a quarter the buying looked stalled. But the newer tracking shows central banks back to buying around 50 tons a month."

Gold-buying countries have spent ten years reducing how much they depend on the dollar, but one fiscal quarter doesn't undo a ten-year plan. "For the long run, that's the buyer I care about, because when the price drops they don't sell, they usually buy more," Han noted.

It's a confusing time for gold investors, as high economic and geopolitical strife usually give gold a boost, but not this year.

"People are acting like gold failed at its job, and I get the confusion, as war starts, gold drops, and that seems backward," Han said. "But gold ran to 5,595 in January before the war even started, so the scared money had already bought in."

As the Iran conflict heated up, oil prices rose, which triggered higher inflation, and inflation forced the Fed to keep interest rates high. "That's the part most people miss," Han said. "Gold doesn't pay you anything to own it, and right now T-bills pay over 4%, so a lot of cash parks there instead."

Yet Han sees a big buying opportunity with gold even as its value erodes, as long as investors show patience. A case in point. Back in 2011, it peaked around 1,900, then bled for four years, down more than 40 percent. "Most people quit on it," Han noted. "Then it came all the way back and doubled. In 20 years of trading,"

As long as investors don't mind the long boring stretches that come with gold ownership, then a huge run follows closely behind. "Consequently, buying today at 22% under the January high is fine as long as you're not expecting a payoff next month," Han added.

Commodity experts support that sentiment, noting that gold should be viewed as a long-term investment and measured over 10 or 20 years, not by how it reacts to a single geopolitical crisis. "That's why I continue to like holding physical gold in a self-directed IRA or solo 401(k), where the focus is on building wealth over decades, not days," Adam Bergman, founder of Miami-based IRA Financial, told Moneywise.

Historically, financial advisors recommend Main Street investors keep 5% to 10% of a portfolio in gold as a portfolio hedge. That's a move that Bergman supports, with a caveat.

"Depending on someone's overall portfolio and risk tolerance, I could even see a modestly higher allocation today," he noted. "Gold has more than doubled over the last five years and has generated roughly 12% annualized returns over the last decade, despite periods of volatility."

One thing Bergman said he's learned after working with retirement investors for more than 20 years is that the most successful ones think in decades, not quarters. "They don't chase headlines or try to time every market move," he noted. "Retirement accounts, especially, are built for long-term investing, and that's exactly how I think investors should approach gold."

Additionally, gold investors need to avoid letting short-term market moves drive long-term investment decisions. "Too many investors spend their time trying to call the exact bottom, and that's a losing game," Bergman said.

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A better move is to buy gold gradually and let time do the work, and keep an eye on interest rates, inflation, Treasury yields, and the U.S. dollar. "Gold has always worked best as a long-term diversifier, not as a trade based on the latest headline," Bergman added.

This article originally appeared on Moneywise.com under the title: Gold crashes from $5,500 to $4,160 since the Iran conflict began, but experts see a massive buying opportunity

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