The US-Iran war has led to a notable shift in safe-haven asset preferences, with investors increasingly favoring the US dollar over gold. The dollar index has surged by over 2% in March 2026, rebounding from a nearly 10% decline in 2025, despite the US's direct involvement in the conflict. Conversely, gold prices have plummeted by approximately 14.3%, falling to ₹1,35,846 as of March 23, 2026, after initially spiking by over ₹8,500 on March 2. Market experts attribute the dollar's strength to the petrodollar system, where oil transactions are primarily conducted in dollars, and ongoing supply disruptions, particularly in the Strait of Hormuz, have increased crude oil prices. This situation compels countries to hold more dollars to manage rising energy costs. Additionally, expectations of prolonged high interest rates in the US, driven by inflation risks from elevated oil prices, further enhance the dollar's appeal. While some analysts believe that gold will remain a strategic asset, its current underperformance during this period of dollar strength suggests a complex interplay of factors affecting both assets. The long-term sustainability of the dollar's dominance remains uncertain, with rising geopolitical tensions and fiscal pressures posing risks to its strength.