Gold set 56 records in 2025, then fell 15% once the February war arrived

Gold set 56 records in 2025, then fell 15% once the February war arrived The metal that rallied 44 percent last year on safe-haven demand has dropped about 15 percent since fighting began on February 28, a lesson in how fast risk premia unwind. Gold has handed back a slice of its record run. The metal rallied 44 percent in 2025 to $4,550 an ounce in December, setting 56 fresh record highs along the way, according to oilprice.com; as of the weekend (2026-06-21) it traded near $4,156.⁴ For an energy desk the level matters less than the message. The same geopolitical premium that pushed gold to those highs is the one traders price into crude, and bullion has just delivered a working example of how quickly such premia drain. The Economist reported the metal has fallen about 15 percent since the war that began on February 28 (2026-02-28), a steeper drop than global equities over the same stretch.² The rally front-ran the conflict. Gold climbed roughly 60 percent between last summer (2025) and late February (2026), helped by a 25 percent jump in exchange-traded fund holdings to around 4,200 tonnes, the Economist said. Then the fighting started and the bid drained.² Central banks were not the engine this time. Official-sector buying eased in 2025 from the prior year's pace, yet bullion still reached a 45-year high, oilprice.com reported, which means private and fund money did most of the lifting.⁴ Official holders can be sellers too. In the fortnight to March 20 (2026-03-20) Turkey sold $8bn of gold to defend the lira, the Economist noted, a reminder that reserve metal gets liquidated when a currency comes under pressure.² China is the connective tissue between the bullion story and the energy complex. Beijing has amassed an estimated 1.2 to 1.3 billion barrels of crude reserves, oilprice.com reported, potentially the largest national oil inventory anywhere, while full-year crude imports rose 4.4 percent in 2025 to 578 million tonnes, mining.com data show.^1,3 Even the stockpiler is choosier than the headline suggests. Chinese crude imports reportedly fell about 20 percent year-on-year in April (2026-04) to a four-year low, with seaborne volumes down to 8 million barrels a day, the weakest since 2022, after January-February buying had surged 16 percent to almost 12 million barrels a day, oilprice.com reported.¹ The accumulation is selective across the barrel and the tonne. China's coal purchases fell 9.6 percent to 490 million tonnes in 2025, the first decline since 2022 and the steepest in a decade, while gas imports slipped 2.8 percent to 128 million tonnes as record domestic output and softer industrial demand bit, mining.com reported.³ A firmer dollar does gold no favours. The DXY sat at 100.76 over the weekend (2026-06-21), up 0.53 percent, while the VIX held at a calm 16.78, hardly the backdrop of a market clamouring for haven assets. The Economist captured the mood when it judged gold to be looking less glittery, a metal that emanates no cashflows and increasingly trades more like crypto than a coupon-paying bond.² For crude traders the read-across is direct. Gold rose for months on the expectation of conflict and sold off once the conflict was real, which is how an oil war premium behaves when the feared barrels never actually leave the market. ICE Brent crude front-month sat at $80.38 over the weekend (2026-06-21), a level that already reflects little fear. Whether bullion's December peak of $4,550 stands as the cycle high will turn on whether fund and central-bank demand returns or the dollar keeps grinding higher.^4,2