David Woo: Multi-Year 'Proxy War' In Iran & Why Gold Is No Longer a Safe Haven

Why It Matters

Gold’s weakening safe‑haven status forces investors to reassess portfolio hedges, while rising U.S. defense spending and larger deficits could eventually reignite demand for the metal.

Key Takeaways

• Gold’s correlation with stocks now positive, weakening safe‑haven status.
• Retail investors’ equity gains drove recent gold price surge, not fundamentals.
• Iran‑US conflict viewed as first US‑China proxy war.
• Prolonged war likely spurs higher US defense spending and larger deficits.
• Oil prices remain volatile, but won’t guarantee gold’s upside.

Summary

The Palisades Gold Radio interview with analyst David Woo focused on the shifting dynamics of gold amid the ongoing Iran‑United States conflict, which he frames as the first proxy war between the United States and China. Woo argued that gold’s traditional safe‑haven narrative is eroding, as recent price moves have been driven more by retail equity exposure than by macro‑economic fundamentals.

He highlighted three core observations: first, gold’s correlation with equities turned positive last year, largely because retail investors bought gold alongside the “Magnificent 7” tech rally; second, oil’s price spike and the war’s geopolitical risk have not translated into a gold rally, underscoring a decoupling from its historic drivers; third, the conflict is prompting a likely surge in U.S. defense spending, expanding the budget deficit and potentially fueling long‑term inflationary pressures that could eventually benefit gold.

Woo cited concrete data points – a 60 % gold gain in 2023 despite a collapsing oil market, China’s 10 % share of global gold production and declining imports, and the repositioning of two U.S. carriers after Iranian missile attacks – to illustrate how the war’s outcomes are shaping market expectations. He warned that if the United States fails to secure a decisive victory, defense‑budget escalations could accelerate, creating a more bullish environment for gold.

For investors, the takeaway is clear: gold can no longer be treated as an automatic hedge against geopolitical turmoil. Short‑term price action will track equity sentiment and retail flows, while longer‑term prospects hinge on fiscal and defense‑spending trajectories that could revive gold’s inflation‑hedge appeal.

Original Description

Recorded on: March 25, 2026

Stijn Schmitz welcomes a new guest to the show David Woo. David is a Macro Analyst and Former Wall Street strategist. In this wide-ranging interview, Woo provides insights into the current geopolitical and economic landscape, focusing on the ongoing conflict in the Middle East and its potential implications for global markets. Woo argues that the current war represents the first proxy conflict between the United States and China, with Iran playing a strategic role. He suggests that the conflict's outcome could significantly impact global dynamics, particularly concerning oil trade and maritime control. Specifically, he highlights the potential for China to resist US control of the Strait of Hormuz, drawing parallels to historical conflicts like Japan's attack on Pearl Harbor.

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Regarding gold, Woo offers a nuanced perspective. He explains that gold's recent performance has been more closely correlated with stock market movements, driven largely by retail investor behavior rather than traditional fundamental drivers like inflation or de-dollarization. While he remains long-term bullish on gold, he believes the metal's short-term performance is more tied to broader market sentiment.

On oil markets, Woo is fundamentally bearish, citing massive global production increases from non-OPEC producers like Ghana, Venezuela, Brazil, and the United States. He anticipates oil prices will eventually collapse, particularly once the current conflict resolves. He also sees potential opportunities in defense-related sectors, believing increased military spending is likely in the conflict's aftermath. Woo's analysis extends to broader geopolitical trends, including the potential reshaping of global economic relationships.

Timestamps:

00:00:00 - Introduction

00:00:40 - Guest Introduction and Welcome

00:03:30 - Gold's Correlation with Stocks

00:06:38 - Retail Investors Driving Gold

00:10:54 - De-dollarization and Inflation Trends

00:13:00 - China's Gold Buying Impact

00:15:17 - Energy Outlook

00:19:22 - Iran Off-Ramp?

00:21:56 - War Outcomes and Military Spending

00:23:00 - Conflict Outcomes

00:25:00 - Hormuz in Dire Straits?

00:27:15 - Proxy War with China

00:30:30 - Petrodollar System Status

00:32:57 - Oil Futures Curve Analysis

00:34:22 - Oil Demand

00:37:30 - Short-Term Approach

00:38:33 - Rare Earth Metals

00:41:00 - His Book and Gold

Guest Links:

Website: https://davidwoounbound.com

X: https://x.com/Davidwoounbound

YouTube: https://www.youtube.com/@DavidWooUnbound

Formerly Head of Global Interest Rates and former senior Wall Street strategist, David built his reputation by challenging consensus thinking — calling Trump's 2016 election, the post-COVID rebound, and major macro inflection points before they happened.

One of the most respected macro strategists on Wall Street, today he brings that same independent, data-driven analysis directly to retail investors — free from institutional bias, groupthink, and agendas.

He is joined by John Hopkinson, PhD, a mathematician trained at MIT, who translates David's macro vision into precise, actionable trading strategy — complete with stock selections, targets, and stop levels published every week.

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