Gold sheds its safe-haven status. Is it just another momentum play now?

MarketWatch

by Vivien Lou Chen

February 22, 2026

AI-Generated Deep Dive Summary

Gold’s long-standing reputation as a safe-haven asset is being challenged as it appears to shift into a momentum play, influenced by short-term market dynamics rather than its traditional role as a hedge against economic uncertainty. Over the past three years, gold has experienced a remarkable bull run, reaching record highs and capturing investor attention. However, recent developments suggest a potential turning point. Despite escalating tensions between the U.S. and Iran, which typically drive demand for safe assets like gold, the metal failed to sustain significant upward momentum last week. Gold futures dropped 4.9% from its peak of $5,318.40 per ounce in January, struggling to stay above $5,000 for most of the week until a rally on Friday. Silver prices also saw a sharp decline, falling nearly 29% from an all-time high of $115.08 per ounce in January. These trends raise questions about the role of precious metals in the commodities supercycle and whether they are now more closely tied to speculative market movements rather than their historical safe-haven status. The lack of sustained growth in gold prices, even amid geopolitical tensions, indicates a potential shift in investor sentiment. While some analysts had expected gold to play a central role in the commodities supercycle—driven by factors like inflation, supply chain disruptions, and increased demand for alternative investments—the recent underperformance suggests a more nuanced dynamic. The decline in silver prices further complicates this narrative, as silver often correlates with industrial and investment trends rather than purely safe-haven demand. This divergence highlights a possible decoupling of precious metals from broader economic fundamentals, making them increasingly vulnerable to short-term market fluctuations. For investors and finance enthusiasts, understanding this shift is crucial. Gold’s transition from a reliable hedge to a momentum-driven asset reflects broader market trends where sentiment and speculative behavior play a more significant role in pricing than traditional safe-haven dynamics. This transformation underscores the evolving nature of financial markets and the growing influence of short-term trading strategies. As gold’s performance becomes more tied to immediate market conditions, its role in diversified portfolios may need reevaluation. Investors must now consider whether to treat it as a hedge against long-term economic uncertainty or as a speculative play subject to rapid price swings. Ultimately, the current trajectory of gold and silver prices signals a complex interplay between traditional safe-h

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Originally published on MarketWatch on 2/22/2026