The war in Iran caused rapid reversals in world markets, challenging key investment rules. Unlike the 2025 tariff crisis which caused a 20% drop, the recent correction was limited to 9%. They collapsed traditional relations: shares and bonds moved downward simultaneously, the dollar was linked to the course of oil, while gold lost its role as a safe haven. The Central Banks of Turkey and Russia went on to liquidate gold. Liquidity emerged as the new absolute sovereign, with markets being overly complacency despite the long-term duration of the conflict.
Analyticalally:
The war in Iran has upset markets and has begun to call into question basic rules that investors considered to be given and unchanged. Those who attended the last year the course of stock prices, bonds, gold and dollar saw that shock from the disruption of the global energy chain was not just a distinct event in a single sector. But the focus of an earthquake that with its vibrations rocked all assets and investment elements. Leading to twists that force investors to look again through another look at risk management, portfolio composition, as well as investment approach and action in times of geopolitical instability and uncertainty.
First of all we have found that markets have been trained to assimilate political and geopolitical threats in a different way than previous crises. Compared to the recent fall in shares with the shock from the imposition of White House duties in 2025, the recent market correction was clearly milder. So instead of falling about 20% as it had happened twelve months ago, this time the bottom of the sinking was around 9%. Although the war in Iran is much more «heavy» World event.
This is translated by analysts as an expression of greater confidence in market mechanisms, stronger resilience to the movements caused by the mental stress of investors, as well as high expectation that panic decisions and situations can be mitigated or even overturned in a shorter period of time. However, not taking into account the time lag that always follows the attempts to return to the pre-existing situation. Markets now appear to be invoicing the possibility of reversing political and geopolitical movements, much faster than before.
What else did we find out? That the established notion that government bonds are always a safe haven when shares slide proved inaccurate. During the crisis, with oil rising and fears of resurgence of inflation rising exponentially, both shares and bonds moved downward, losing their classic reverse behavior. That is what is known as the «trabala phenomenon», where when the shares go up the bonds and vice versa. We are therefore drawn to the conclusion that portfolios based on a single investment recipe that until now yielded may be more vulnerable than their managers think. The spread of risk and risk is no longer a matter of distributing assets to different categories. But it has turned into an attempt to find more flexible solutions and alternative protective mechanisms.
But it wasn't just the bonds that moved in a subversive way. And the dollar, traditionally considered «safe haven», did not behave in the expected way of all. In many parts of the crisis, its parity was closely linked to the course of oil, showing upward trends, even when «black gold» It was reinforced. Which is rather a reverse of the traditional image where the dollar was a monetary anchor and a safe haven regardless of commodity prices. And immediately after the announcement of the truce, oil subsided sharply and the dollar fell more than planned on the basis of historical stock patterns. The oil-dollar relationship at such times shows that exogenous factors can overcome traditional structures of currency market balance and commodity market.
Nor does gold, which for hundreds of years has been the most classic and safest refuge against all kinds of dangers, retain its role this time in Iran's war. Instead of strengthening, at the time of the slippage of the prices of the other investment elements, gold behaved more like a vulnerable asset. Seeing his price yielding strongly alongside share prices. Many investors sold gold to increase their liquidity. Moreover, the fact that gold is now most of the central banks' foreign reserves means that it can be converted into a source of liquidity in times of shock. In other words, it is more likely to be sold, as has recently happened with heavy gold liquids, by the Central Banks of Turkey and Russia.
Markets with in mind and experience from the Russian invasion of Ukraine, know that modern military conflicts do not end quickly. So they know that the war in Iran will last a long time, and that the impact on the supply chain and the energy sector will be long-term. In the long term, changes in the geopolitical scene and new regional balances will be too. So investors learn to navigate against long waves.
We therefore see that we are faced with significant reversals that drastically alter investor behaviour. Traditional «values» Like the dollar and gold lose their glow. Traditional property relationships such as the gold – dollar or dollar – oil pair, or twin shares – bonds, are overturned and the compensation strategies, the famous «hedging»And the word that dominates all analyses is «liquidity». To put it even simpler, old stock quotes like «oil is the king» and «gold is the king» have lost their importance with liquidity is the ultimate dominant of the game.
And as liquidity seems to be inexhaustible nowadays, markets are held by a diffuse and excessive complacency.
