Middle East tensions boost gold as investors seek safe havens
Heightened tensions in the Middle East are driving demand for safe-haven assets, with gold attracting increased interest as equities and cryptocurrencies come under pressure.
On Wednesday, reports indicated that Iran has sharply expanded crude oil exports, with shipments from Kharg Island totaling 20.1 million barrels between Feb. 15 and Friday—about three times January’s level—described as a preemptive supply release and a hedge against potential disruption if tensions with the United States escalate.
Concurrently, more hawkish U.S. rhetoric on Iran’s nuclear program has lifted expectations of confrontation, according to Bitunix analysts. “In the event of a direct U.S.–Iran military conflict, gold could rise by roughly 15% within two weeks on safe-haven demand, targeting a range of $5,500–$5,800 per ounce,” the analysts said.
Bitunix added that crypto markets remain sensitive to macro drivers. Safe-haven flows into the U.S. dollar could pressure Bitcoin (BTC) toward the $64,000–$65,000 zone; alternatively, if inflation concerns take precedence over dollar strength, capital could rotate into alternative hedges and push BTC toward $69,000 liquidity levels.
Uncertainty fuels demand for safe havens
Evidence of rotation into defensive assets is already apparent. Data shared by The Kobeissi Letter on Thursday showed Indian investors are rapidly reallocating capital into gold. Gold ETF inflows in India have reached about 250 billion rupees ($2.7 billion), an all-time high, surpassing equity mutual fund inflows for the first time. According to The Kobeissi Letter, demand for gold ETFs has risen more than 900% since July, while stock-fund inflows have declined by around $1.9 billion.
Indian investors turn to gold ETFs. Source: The Kobeissi Letter
Gold is currently trading near $5,172 per ounce, slightly lower on the day. Over the past week, prices have advanced by $219 (4.4%).
Gold price over the past week. Source: GoldPrice
Muted conviction keeps Bitcoin range-bound
While gold is benefiting from defensive flows, on-chain data indicates that conviction in crypto remains limited. Glassnode reported that Bitcoin has continued to trade between $60,000 and $70,000 amid weak whale accumulation and persistent ETF outflows.
The firm also noted that nearly 9.2 million BTC are currently held at a loss. The 90-day realized profit-to-loss ratio has fallen below 1, indicating more holders are realizing losses than profits.
U.S.-listed spot Bitcoin ETFs saw a rebound on Wednesday as Bitcoin moved back above $68,000. The funds drew about $506.5 million in daily inflows, the largest since early February, positioning them for a first weekly net inflow after five weeks and $3.8 billion in outflows.
Total BTC supply in loss. Source: Glassnode
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