Risk-averse capital flows undergo a major reshuffle—The US dollar becomes the ultimate winner

The traditional "safe haven trio"—gold, silver, and Bitcoin—all failed during this round of Middle East conflict. The real winner is the US dollar, the oldest and most traditional safe haven asset.

Gold: Why has the safe haven halo failed? Gold prices not only failed to rise as expected but also experienced selling. Currently, COMEX gold futures are at $4,676 per ounce, significantly below previous highs. The core reason lies in the transmission mechanism changing: soaring oil prices → rising inflation expectations → strengthened Federal Reserve tightening expectations. Under this logical chain, as a non-yielding asset, safe haven buying in gold is sharply offset by rising real interest rate expectations, with interest rate logic overpowering geopolitical logic.

Silver: Double-sided pressure. Silver is supported by safe haven demand but also suppressed by industrial demand. Currently, silver is around $72.99 per ounce, with volatility significantly greater than gold. When energy prices surge and global economic outlook deteriorates, expectations of declining industrial demand will further suppress silver prices.

Bitcoin: Still dominated by risk asset characteristics. Although Bitcoin briefly broke $70k, falling back to $68,568 indicates the market still does not see it purely as a safe haven. The Fear & Greed Index once hit an extreme level of 10, with funds shifting toward defensive and cash-flow assets.

The US dollar: The ultimate winner. When market risk sentiment heats up, investors shift their preference from risk-return pursuit to asset liquidity, with large-scale capital inflows into the most liquid assets—the US dollar cash. The dollar index hovers around 100, reflecting this risk-averse preference.

Structural changes in capital flows: In this conflict, gold ETFs experienced net inflows—SPDR holdings increased to 1,054.42 tons (+3.43 tons)—but this was more strategic allocation rather than safe haven buying. The true "panic funds" flowed into the US dollar and energy-related assets, not traditional safe havens. This structural change suggests that in future geopolitical crises, traditional safe haven logic may continue to fail, requiring investors to adopt more nuanced asset analysis frameworks.

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