Gold's haven status faces scrutiny after prices dropped 12 per cent since the Middle East conflict began, contradicting traditional expectations. The Standard Chartered commodities head argues gold's fundamental role remains intact despite short-term volatility. Historically, gold provides crucial liquidity during market stress without losses, though such needs typically weigh on prices for four to six weeks post-crisis.

Gold's recent decline exceeds past geopolitical shocks due to record highs in January and extreme positioning. Exchange-traded products saw steep March redemptions, while central bank buying slowed to 863 tonnes last year. The precious metal now responds to US rate expectations rather than safe-haven drivers, with spot prices falling below the 50-day moving average – the largest gap since 2013.

Gold remains undervalued given it doesn't price in recession risks (historically rises 15% during downturns) or stagflation fears. Structural drivers like elevated debt, currency debasement, and geopolitical uncertainties persist. The 200-day moving average hasn't been breached since October 2023, suggesting a solid price floor.