OK, we admit we’re flummoxed! The chart below shows that the gold price has fallen by about 10% since the Iran conflict began on February 28 and oil prices surged.

But usually a higher oil price and a higher inflation rate are a signal to BUY gold, not sell it. We’ve seen arguments that interest rates have been rising and therefore investors are selling gold and buying bonds. That doesn’t make a lot of sense, since the higher interest rates reflect higher inflation and inflationary expectations.

Gold is supposed to be a hedge against inflation and against global supply constraints, as we are seeing with oil.

Many of our readers have asked us the same question: If gold is a safe haven and inflation hedge, why is it falling hard amid war and inflation fears?”

We will give an ounce of gold (or something like that) to anyone who can satisfactorily answer that question.