This Is How The Iran War Could Affect The Price Of Gold: Steve Forbes

Finance-Focused Summary (Markets, Macro, Investing Takeaways)

Gold Price: Interpretation of the Move

• Gold’s dollar price is described as having fallen from >$5,000 earlier this year to around ~$4,000 today.
• Steve Forbes argues this is not a drop in gold’s “real” value. Instead, it reflects a strengthening U.S. dollar:
  • A greenback rally versus other currencies.
• In this framing, gold acts as a currency “measuring stick”—gold remains the constant, while price changes primarily indicate currency value shifts.

Why the Dollar Is Rising (Macro Drivers)

• Policy shift
  • Since last January’s gold surge to $5,000, the Trump administration is portrayed as moving away from talk of devaluing the dollar to reduce the trade deficit.
  • Forbes characterizes currency “cheapening” as monetary inflation, which he argues is harmful to the economy.
• Fed leadership
  • A new Federal Reserve head, Kevin Warsh, is described as emphasizing currency stability to fight inflation (rather than suppressing real activity).
• Rates rising despite a stronger dollar
  • Even with a dollar rally, interest rates are said to be moving higher due to Treasury supply/demand:
    • The U.S. is issuing “boatloads” of Treasuries to fund a huge current deficit.
    • It’s also refinancing trillions in maturing debt.

Key Rate Level Mentioned

• The 2-year Treasury rate is stated to have jumped past 4%.

Caution on Expectations / Timeframe

• Forbes warns against expecting an easy dollar recovery (“champagne” for the dollar).
• The dollar is said to have lost considerable value since 2022.
• Historical gold context provided (approximate):
  • ~$1,800/oz in 2022
  • ~$2,300/oz two years ago
  • ~$3,300/oz a year ago
  • ~$4,000/oz today
  • Still up >20% from last summer

Scenario Risks: Iran War → Energy → Rates → Debt-Market Stress

• The ongoing Iran war could raise energy prices.
• Higher energy costs could increase pressure on the Fed to hike rates, especially with Warsh facing “reactionaries.”
• That combination could unsettle debt markets amid uncertainty around rates and inflation.

Secondary Risk: International Monetary Stress

Forbes suggests an “international monetary crisis” could be triggered by panic in major currency systems, specifically:

• Japanese yen
• British pound

Key leverage points highlighted:

• Japan’s national debt is described as proportionally twice the U.S. level.
• Japanese financial institutions hold government debt issued at virtually no rate of interest, which would lose value sharply as yields rise.
• UK political risk:
  • If the UK prime minister acts “radical,” it could weaken the pound and reduce the UK government’s ability to sell bonds to finance deficits.

Historical Analogy Used

• Mid-1980s: A strong dollar versus major currencies is said to have contributed to a crisis.
• Washington eventually reduced the greenback, which Forbes links to dynamics associated with the 1987 stock market crash.

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Explicit Investment Stance / Recommendation (and Rationale)

• Forbes states: “Gold is not an investment. It’s insurance for financial troubles.”
• Recommendation: “Keep the insurance” — maintain gold exposure as a hedge, not as a growth investment.

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Tickers / Instruments / Assets Mentioned

• Gold (yellow metal)
  • Price levels referenced: $5,000, $4,000, $1,800, $2,300, $3,300
• U.S. Treasury securities
  • 2-year Treasury — >4%
  • Mentions short- and long-term Treasury securities
• Currencies
  • U.S. dollar (USD) / “greenback”
  • Japanese yen (JPY)
  • **British pound (GBP)”
• Energy prices
  • No specific energy commodity ticker mentioned

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Framework / Methodology (Narrative, Not Formal Valuation)

• No formal step-by-step portfolio or valuation methodology is provided.
• The narrative logic:
  • A gold price decline in USD terms is treated as USD appreciation, not a true loss in gold’s “real value.”
  • Higher rates are explained mainly by Treasury issuance supply/demand:
    • deficit financing
    • refinancing of maturing debt

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Key Numbers and Timelines Explicitly Stated

Gold

• Earlier this year: >$5,000
• Today: ~$4,000
• 2022: ~$1,800
• Two years ago: ~$2,300
• One year ago: ~$3,300
• Still >20% above last summer

U.S. Treasuries

• 2-year Treasury: >4%

Events / Timing References

• “Since last January” (gold surge to $5,000)
• 2022 comparison
• Mid-1980s crisis analogy
• 1987 stock market crash referenced

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Presenters / Sources

• Steve Forbes (host/presenter)

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Disclosures / Disclaimers

• No explicit “not financial advice” disclaimer is included in the provided subtitles.