【Sydney, Aust】Investors Flock to Gold and Silver Despite Erratic Prices Amid International Conflicts and Inflation Fears

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Editor’s Note

This article examines the recent, sharp reversal in gold and silver prices, highlighting how even traditional safe-haven assets can experience extreme volatility during periods of global uncertainty.

Investors have been seeing lining up at Sydney’s Gold Bullion Exchange in recent months.
Market Volatility Amid Uncertainty

The market for two of history’s safer investments, gold and silver, has become destabilized amidst geopolitical and economic uncertainty. The cost for an ounce of either precious metal grew rapidly over the past year to their most expensive rate on record on January 29, only to rapidly collapse. In just two days, a trading bloodbath wiped more than AU$10 trillion off the market as gold dropped by just over 10 percent, while silver fell a whopping 34 percent.

Investor Resilience Despite Fluctuations

But investors are yet to be scared off the markets, with lines stretching outside a bullion exchange in Sydney’s CBD despite prices continuing to fluctuate rapidly; as much as 10 percent per day in silver’s case.

Expert Analysis on Market Drivers

Optimal Economics Principal and Chief Economist, Stephen Walters, told 7NEWS.com.au the precious metals market hasn’t “seen that sort of volatility for, well, decades really”.

“He said the price of precious metals increases alongside fears of international conflict or economic troubles as people convert cash into ‘assets that are tangible and they can hold’.”

The price of gold and silver first started to increase following the start of the war between Russia and Ukraine, continued to grow in 2024 amid global economic inflation, then skyrocketed during US President Donald Trump’s erratic stance on tariffs.

“These geopolitical events add a lot of uncertainty in investment markets,” Walter said.
Gold bullion, as ever, is a hot commodity.
“But there’s a few other things going on: people are worried about inflation again and we’ve just seen our own Reserve Bank here raise interest rates.”
“There are concerns more broadly globally that inflation may be coming back up. It’s not yet, but there’s some fears that it might.”
“And what people have been doing is thinking, ‘that investment market maybe is due some sort of correction, maybe I’ll rotate into some other asset’, and they’ve been looking at gold, and particularly looking at silver.”
Explaining the Sharp Decline

But the severe fall from all-time highs for both metals is harder to explain, Walters says. He said initial falls could be attributed to Trump announcing Kevin Warsh as the new chair of the US Federal Reserve, as Warsh is tipped to stamp out inflation fears by bringing stability back to the market.

The Role of Social Media and FOMO

But he believes that both the rapid rise and fall of both metals could be attributed to social media and fear of missing out (FOMO), likening the gold and silver investment craze to the hype around cryptocurrencies.

“Most people have got an iPhone or access to the internet and see this stuff happening in real time,” Walters said. “It does amplify the move and I think that’s what happened last week, given these assets had such big run-ups.”
Gold bullion, as ever, is a hot commodity.
“You see the price all over the news and now the internet’s showing silver’s in freefall, that does encourage a lot of people who would not normally have known that to start selling their assets as well.”
Long-Term Outlook and Safe-Haven Status

While the near future of the precious metals market is uncertain, Walters still sees it as a stable and navigable investment opportunity.

“(Gold) will always be a popular asset. In 4000BC people wanted to hold gold and, funny enough, 6000 years later, we still do,” he said.

Other tangible assets such as property also differ to precious metals as it’s “very illiquid”, Walters said, adding the simplicity of buying and selling coins or bars of gold and silver makes them easier to trade.

“It’s proven to be right through the last 100 years or so, that whenever we’ve had an economic crisis of some sort, whether it’s oil shocks in the Middle East or the global financial crisis or the COVID pandemic, all through those crisis periods for the global economy, people bought gold,” he said.
“It was a perceived safe haven in times of extreme uncertainty and that’s why they’re behaving that way again.”
Long queues are a regular sight outside a gold bullion exchange in Sydney.
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⏰ Published on: February 11, 2026