Today's Edition
BATOOL GHAITH (ABU DHABI)
Rising regional tensions are reshaping global markets, exposing a sharp divergence between digital assets under pressure and precious metals surging on renewed safe-haven demand.
Bitcoin has extended its slide into March, capping one of the most challenging stretches in its history even as major global banks accelerate efforts to integrate crypto into traditional finance.
The world's largest cryptocurrency ended February down 15%, marking five consecutive months of losses and a 48% decline from its all-time high of $126,500 in October 2025.
For the first time on record, both January and February closed in negative territory in the same year. If March also finishes lower, it will represent six consecutive monthly declines, only the second such occurrence historically, according to a statement from eToro.
Simon Peters, crypto analyst at eToro, said Bitcoin has started March "on the backfoot" amid rising geopolitical tensions in the Middle East, which have triggered a broader flight from risk assets.
He noted that US economic data this week, including ISM manufacturing and services PMI, ADP employment figures and non-farm payrolls, will be closely watched ahead of the Federal Reserve's next meeting.
"While markets are pricing in a hold on rates, softer data could increase expectations of a cut, potentially offering support to cryptoasset prices," Peters added.
He noted that institutional adoption continues to gather pace. Citibank has announced plans to integrate bitcoin into its core banking systems.
Peters said that the move aims to make the asset "bankable" through institutional-grade custody, key management and wallet services, as well as traditional tax, reporting and compliance workflows for digital assets.
While crypto markets have struggled under the weight of geopolitical tensions and shifting macroeconomic expectations, the precious metals segment has exhibited more complexity, marked by sharp rallies, sudden pullbacks and renewed rebounds as investors navigate a volatile global environment.
Gold and silver, traditionally seen as safe-haven assets, have experienced notable swings in recent days.
Gold prices climbed more than 1% on Wednesday, trading at $5,177 per ounce, recovering from a more than one-week low recorded in the previous session.
The rebound followed a sharp decline a day earlier, when gold bullion dropped more than 4%, falling to its lowest level since February 20.
Spot silver rose 3.1% to $84.61 per ounce on Wednesday, after plunging more than 8% in the previous session.
Traditional Safe-haven Assets
Economic expert Wajdi Makhamreh said these fluctuations should be viewed within a broader context in which precious metals continue to benefit from geopolitical uncertainty, even as short-term macroeconomic forces temporarily pressure prices.
He pointed out that gold and silver remain traditional safe-haven assets, and the ongoing geopolitical conflicts, particularly rising tensions and military actions involving the US, Israel and Iran in the Middle East, have pushed precious metal prices higher in early 2026.
According to Makhamreh, gold has been trading around $5,400 per ounce in recent weeks, with peaks pushing towards or above the $5,400-$5,600 range during volatile sessions.
"Prices are significantly higher year-to-date and reflect substantial gains accumulated over the past several years," Makhamreh told Aletihad.
He indicated that silver has been trading in the $95-$96 per ounce range during its strongest recent phases, demonstrating strong momentum and often amplifying gold's moves due to its dual role as both a safe-haven asset and an industrial metal.
Makhamreh explained that the immediate catalyst for much of the recent rally has been the intensification of the US-Israel-Iran conflict, including strikes and retaliatory actions that have heightened global uncertainty.
"Such developments typically drive safe-haven buying as investors shift away from riskier assets amid fears of wider escalation, potential disruptions in global energy markets and the inflationary pressures that prolonged instability could trigger," he added.
Silver also benefits from industrial demand tied to sectors such as green energy, electronics, and AI related technologies, although in the short-term geopolitical uncertainty remains the dominant driver, he added.
However, Makhamreh said that the recent pullback in prices reflects several important countervailing forces, such as the strengthening US dollar, which has climbed to multi-week or one-month highs.
"Because gold and silver are priced in dollars, a stronger dollar effectively makes them more expensive for buyers using other currencies, dampening demand and exerting downward pressure on prices," he noted.
Shifting expectations around US interest rates have also played a key role. Markets have recently scaled back bets on multiple Federal Reserve rate cuts in 2026, Makhamreh explained.
"Higher or stable interest rates raise the opportunity cost of holding non-yielding assets such as gold and silver, making interest-bearing investments comparatively more attractive," he said.
Inflation concerns, driven in part by rising oil prices, have also reinforced expectations of a more hawkish policy stance from the Fed, according to Makhamreh.
As geopolitical risks remain present, they have recently been overshadowed by currency strength and shifting interest rate expectations, he added, which is why prices have occasionally fallen even as regional tensions persist.
Looking ahead, if geopolitical tensions intensify further, Makhamreh said that analysts believe precious metals could continue climbing.
Some projections place gold in the $5,800 to $6,000 range in the near term, with longer-term forecasts suggesting levels above $6,000 by the end of 2026 or beyond.
Silver could potentially move towards $100 to $150 in more aggressive scenarios, reflecting its tendency to amplify gold's gains.
On the other hand, any meaningful de-escalation through diplomatic breakthroughs or containment of the conflict could trigger a correction, Makhamreh said, noting that silver, given its higher volatility, tends to experience deeper corrections than gold.
"In such a scenario, gold might consolidate or retreat towards lower levels, while silver could experience steeper declines," he noted.
