Safe Haven Assets: Winners and Losers in Geopolitical Crises

Financial markets often endure turbulence during geopolitical conflicts, and investors scramble to protect their wealth. A study highlights the performance of safe-haven assets during geopolitical crises.

A recent study from InvestorsObserver analyzed the behavior of four key «safe-haven» assets.

1. Gold: The Old Guard Under Pressure

Gold has long been viewed as the ultimate portfolio shield, grounded by its tangible value, low correlation with equities, and central-bank demand. Historically, it surged in crises like the Gulf War (+0.76 percent weekly) and after 9/11 (+1.12 percent)

Yet during Operation Rising Lion, gold dropped nearly 3.2 percent. Analysts attribute this to two factors: the swift de‑escalation of the conflict and growing investor appetite for Bitcoin, which may siphon off traditional gold flows.

2. US Dollar Index: An Unreliable Guardian

Contrary to popular belief, the dollar doesn’t always strengthen during crises. On average, the DXY fell 0.19 percent one month post-conflict. For instance, post‑2024 Iran‑Israel tensions, it dropped 5.7 percent, as funds rotated toward gold and oil.

Even in 2025’s Operation Rising Lion, it slid 0.30 percent. This inconsistent pattern is influenced by monetary policy – e.g., during the Ukraine War, aggressive Fed rate hikes drove a near‑12 percent rise in DXY over six months.

3. Swiss Franc: The Quiet Champion

The Swiss franc emerged as the most consistent safe haven. In every conflict analyzed – from the Gulf War to Operation Rising Lion – it strengthened against the dollar, averaging roughly +0.85 percent per month.

This is largely due to Switzerland’s historic neutrality and a stable banking system. Even when the DXY tumbled, the Swiss franc often rose, up 2.9 percent after the 2024 Iran‑Israel conflict, while the dollar fell 5.5 percent.

4. Bitcoin: A Digital Wild Card

Bitcoin’s short-term track record is volatile. It steeply fell -43.3 percent over six months post‑Ukraine invasion, then surged +32.1 percent in the year following the 2024 Iran‑Israel strikes.

During Operation Rising Lion, Bitcoin edged up +0.42 percent, outperforming both gold and the franc. This supports the narrative that Bitcoin might be gaining traction as a digital haven for investors in fast-moving or tech-connected conflicts. Yet, absent decades of data, it remains speculative.

Portfolio Takeaways

No single asset is universally reliable. Gold falters in speedy conflicts, and the dollar can both surge and slump.
Consistency matters. The Swiss franc stands out as the most dependable crisis currency.
Diversification is key. Allocations across gold (for long-term stability), francs (for currency safety), and selective exposures to Bitcoin (for digital diversification) can reduce overall risk in turbulent times

Final Thought

While history backs gold and the Swiss franc as time-tested hedges, recent trends show cracks in that narrative.
Bitcoin’s evolving role and the dollar’s instability highlight the need for nuanced, diversified strategies, tailored to the specifics of each geopolitical event.