BAKU, Azerbaijan, March 12. The escalating tensions in the Middle East have heightened anxiety across global financial markets, prompting investors to gravitate toward assets traditionally regarded as safe havens, Rovshan Amirjanov, Deputy Chairman of the Board of Directors of the Azerbaijan Jewelers Association Public Union and Chairman of the Technical Committee on Precious Metals and Gemstones, told Trend.
"In this environment, precious metals, particularly gold and silver, have once again moved to the forefront of investor attention. However, attributing current market developments solely to geopolitical dynamics would be an oversimplification. The situation unfolding in global markets reflects the simultaneous influence of several interconnected factors shaping price movements," he added.
According to Amirjanov, one of the most notable developments in global financial and commodity markets in recent days has been the simultaneous rise in both gold and oil prices, albeit driven by different underlying forces.
“Although both assets have recorded gains, the factors driving these increases are not identical. Oil prices are primarily influenced by supply risks and operational developments reflected in the news flow. Gold, by contrast, is benefiting from growing demand for safe-haven assets as geopolitical uncertainty intensifies,” he explained.
The expert emphasized that the recent surge in gold prices cannot be attributed solely to geopolitical tensions.
“This process is also significantly shaped by fluctuations in the U.S. dollar, expectations surrounding interest rate policy, and developments in energy markets. The decline in energy prices is reinforcing expectations that inflationary pressures may gradually ease. This, in turn, softens market expectations regarding the continuation of tight monetary policy by central banks. In such an environment, gold, being a non-yielding asset, often gains additional support. As a result, investors increasingly view gold as both a hedge against geopolitical risks and a safeguard amid the possibility of relatively looser financial conditions,” Amirjanov noted.
He further highlighted the strategic importance of the Strait of Hormuz in this context.
“The Strait of Hormuz represents one of the key arteries of the global energy supply system. Any serious disruption or heightened risk along this route can intensify price pressures in energy markets and trigger broader volatility across commodity markets. Such developments may provide additional upward momentum for gold prices. For this reason, investors view developments in the region not merely as political events but as risk factors with direct implications for market dynamics,” he said.
According to Amirjanov, the gold market is currently being shaped by two principal forces.
“On the one hand, there is defensive demand fueled by geopolitical risk. On the other hand, there are shifts in energy prices, inflation expectations, and interest rate policies. At times, these factors reinforce one another, pushing gold prices higher; at other times, they generate short-term volatility in the market.
Looking ahead, the most plausible near-term scenario appears to be a period of broad price fluctuations in the gold market. Should regional tensions intensify further, investor demand for safe-haven assets may accelerate, potentially driving gold into a new phase of growth. Conversely, an increase in diplomatic engagement and a reduction in pressure on energy markets could trigger a short-term correction in prices,” he said.
Amirjanov stressed that these global developments are also directly relevant to Azerbaijan’s domestic market.
“The rise in global gold prices has a direct impact on jewelry production costs and price formation in the domestic market. For businesses dependent on raw material procurement, effective risk management is becoming increasingly critical. The primary challenge for the domestic market lies not only in rising prices but also in the possibility of sharp and rapid price fluctuations,” he stated.
Speaking about short-term forecasts, Amirjanov noted that the most likely scenario for the gold market is the continuation of a generally positive environment, albeit one accompanied by elevated volatility.
“As long as geopolitical risks remain present, gold is likely to retain its status as a protective asset. At the same time, any signals indicating easing tensions or improving market sentiment could trigger short-term price corrections,” he said.
According to the expert, the outlook for silver differs somewhat from that of gold. While silver often follows the same overall trajectory as gold, it is generally considered a more sensitive and volatile market.
“On the one hand, growing interest in precious metals also supports silver prices. On the other hand, silver’s significant role as an industrial metal makes it more responsive to developments in economic activity. As a result, silver may rise more rapidly alongside gold during periods of strong demand, but it can also retreat more sharply in response to negative economic signals,” Amirjanov explained.
He emphasized that the key question currently facing the market is not whether gold will continue to rise, but how upcoming developments will influence its trajectory.
“The central issue for the market is not the continuation of gold’s upward trend. Rather, the question is whether the next wave of news will trigger another sharp price surge or lead the market into a phase of short-term stabilization. Gold’s primary advantage lies in its perception as a reliable store of value during periods of uncertainty. Silver, by contrast, remains a more flexible, sensitive, and volatile asset. Therefore, while demand for both metals is expected to remain strong in the near term, the decisive factor will be the pace and nature of the news flow influencing the market,” Amirjanov concluded.
To note, an ounce of gold is currently traded on the London Commodity Exchange in the range of $5,140–$5,160, while the price of an ounce of silver stands at around $89.