The World Just Got More Perilous
The headlines going into the holiday season have been nothing short of shocking, tragic, and heartbreaking. From the assault on U.S. troops in Syria, the Brown University shooting, the horrific Hannukah attack on Biondi Beach in Sydney and the foiled New Year’s Eve terror plot in Los Angeles — the entire world seems to be on edge.
All across the U.S and Europe, holiday traditions are either being scaled back, fenced in, or put on high alert. Celebrations, gathering and crowds are soft targets for terrorists, extremists, and madmen. And the heightened global threat environment not only frazzles nerves, it also increases risk aversion among investors and can trigger a measurable shift to safer assets like gold, silver, platinum and palladium.
Is Terrorism Spreading?
The year started with the Bourbon Street vehicle attack on New Year’s Day, and then came the Jewish Museum shooting in D.C. in May, a firebomb attack on an Israeli hostage peace walk in Colorado in June, an attack on an ICE facility in Texas in July and Charlie Kirk’s assassination in Utah in September. In 2025 terror-related bombings, shootings, stabbings, and killings — increased both domestically and globally.
According to Vision of Humanity, a non-partisan platform of the Institute for Economics & Peace (IEP), terrorism is now on the march worldwide.
“The number of countries that experienced a terrorist attack increased from 58 to 66 countries in 2024. While 34 countries improved in 2024, 45 deteriorated, the most countries to deteriorate in a single year since 2018. Additionally, the world’s four deadliest terrorist organisations substantially increased the number of people they killed, while also slightly expanding the number of countries within which they are active.” [1]
The platform identifies the world’s four deadly terrorist organizations as Islamic State (IS), al-Shabaab, Jamaat Nusrat Al-Islam wal Muslimeen (JNIM), and Balochistan Liberation Army (BLA).
According to Colin Clarke, executive director of the Soufan Center, a non-profit global security think tank, the latest attack in Australia is evidence that the extremist ideology of ISIS is once again a serious threat across the globe.
“The Islamic State threat is present in its traditional base of operations in the Middle East, expanding across a growing portfolio of entrenched terrorist insurgencies in various regions of Africa, and perpetuated further by enabled and inspired attackers living in Western nations.”[2]
The Cost of Global Violence Skyrockets
Escalating world violence costs money — a lot of it. Wars, regional conflicts, militarization, economic instability, defense spending, the humanitarian fallout, and the loss of productivity all contribute to the economic impact and rising price of a world that seems to never be at peace.
According to Visual Capitalist global conflict racked up a $19 trillion price tag in 2024 with GDP losses tallying $462 billion. Deaths from worldwide conflicts also hit a 25 year high as war broke out between Russia and Ukraine and throughout Gaza. As a result, the U.S., Europe, and even Japan are now injecting billions into new defense spending.[3]
In addition, the World Economic Forum’s short-term and long-term outlook of deepening geoeconomic tensions presents a global risk landscape that is predominantly “stormy,” “turbulent,” and “unsettled.”[4]
Gold’s Risk Premium
In times of crisis, investors behave fairly predictably; they look to reduce risk. And when it comes to safe havens like gold, there is a market phenomenon called “the terror premium” that causes prices to skyrocket during adverse global events. This reflects the additional value assigned to an asset price due to rising demand resulting from FTO (foreign terrorist organization) attacks, global security threats, and transnational violence.
This risk-induced premium is well documented and recent history chronicles gold price rallies during notable terror events and other geopolitical shocks like the September 11th attacks, the 2003 U.S, invasion of Iraq, Brexit, the start of the Russia-Ukraine War, and the October 7th terror attacks on Israel.
“Gold’s crisis performance connects deeply with psychological perceptions of stability and safety. When national security, financial systems, or general certainty becomes threatened, investors vote with their dollars toward assets, preserving wealth through turmoil. As panic and uncertainty rise, the relative value of traditional assets like stocks, currencies, and even government bonds drop substantially. Gold becomes immediately more attractive by comparison as fears heighten.”[5]
Global uncertainty, instability and chaos often cause markets to stumble and even crash. But as risk rises, gold demand also rises as investors look outside the financial system to rebalance, recalibrate, and realign their portfolio mix with tangible, safe haven assets.
Unfortunately, the world is not getting any safer. Global conditions continue to deteriorate as political, ideological, and extremist pressures escalate. In response, gold prices are increasingly reflecting a volatility-driven premium rooted in heightened uncertainty and investor fear.
“The intricate relationship between global tensions and gold prices has been a defining feature of financial markets for centuries. As international conflicts intensify, gold emerges as a critical safe-haven asset, demonstrating its enduring role as a store of value during uncertain times. Understanding this relationship provides valuable insight for investors navigating today’s complex geopolitical landscape where gold-strategic investment decisions become increasingly crucial.”[6]
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[1] https://www.visionofhumanity.org/terrorism-is-spreading-despite-a-fall-in-attacks/
[2] https://time.com/7341152/isis-bondi-beach-attack/
[3] https://www.visualcapitalist.com/19-trillion-global-cost-of-conflict/#:
[4] https://reports.weforum.org/docs/WEF_Global_Risks_Re port_2025.pdf
[5] https://www.markets.com/education-centre/gold-price-trends-during-geopolitical-crises
[6] https://discoveryalert.com.au/geopolitical-risk-impact-gold-market-2025/
