The conflict between the U.S. and Iran has triggered a surge in oil prices, leading to a strengthening of the U.S. dollar.
However, this round of appreciation is not a return of risk aversion, but rather a &#34;passive benefit&#34; under the reshaping of the global energy landscape: As oil prices soar and severely impact the currencies of energy-importing countries, the U.S., as a net exporter, becomes the destination for funds with no other choice.
This logic is clearly reflected in market performance: The U.S. dollar and the Japanese yen, two traditional safe-haven assets, have diverged. The U.S. has strengthened against the trend due to its status as a net energy exporter, while Japan, which relies on the Strait of Hormuz for about one-third of its energy imports, faces direct pressure on its trade balance, causing the yen to fall over 1% against the dollar on Monday, hitting a new low for the month. The logic of risk aversion has given way to the energy landscape—the strength of the dollar is essentially a passive result of an imbalanced situation.
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However, the short-term weakness of the yen does not mean a fundamental shake-up of its safe-haven status. Goldman Sachs, in its latest report, recommends increasing holdings in gold, the U.S. dollar, and the yen as a core combination to address geopolitical risks. The rationale for this allocation is based on two points: first, the U.S. dollar and the yen, as traditional safe-haven currencies, have a historical win rate of 67% during periods of geopolitical conflict, and are expected to continue strengthening in an environment of rising oil prices and pressure on risk assets; second, gold possesses both ultimate safe-haven attributes and income resilience, with a 12-month expected return of 5.9%, and is negatively correlated with U.S. real yields, highlighting its allocation value during periods of uncertainty.
In terms of specific operations, Goldman Sachs emphasizes that the three should be allocated in coordination to achieve risk diversification: opportunities in the foreign exchange market can be laid out for trading the U.S. dollar, yen, and currencies of oil-exporting countries; gold should be included as a core asset in the portfolio, complementing low-volatility stocks and infrastructure assets. At the same time, one must be wary of the opportunity cost of excessive concentration in a single safe-haven asset; if geopolitical conflicts ease or oil prices fall, positions should be balanced in a timely manner to retain flexibility while resisting shocks.
<h2>The Strength of the U.S. Dollar: Logic in Energy Rather Than Risk Aversion</h2>
Since Trump returned to the White House last year, the traditional safe-haven attribute of the U.S. dollar during market turmoil has significantly weakened, with economic policy uncertainty and geopolitical turmoil leading overseas investors to adopt a more cautious attitude towards U.S. dollar assets.
Last weekend, the U.S.-Israeli coalition launched large-scale bombings on Iranian targets, triggering a chain reaction of regional conflicts. Following the news, the U.S. dollar index surged sharply, seemingly reigniting risk aversion. However, Reuters columnist Mike Dolan pointed out that the core logic behind this dollar appreciation is not a surge of funds into the dollar as a safe haven, but rather stems from the structural differences in energy exposure among major economies—buying dollars is more about selling the currencies of energy-importing economies.
Market performance confirms this judgment. On Monday, international oil prices surged by as much as 10%, directly pressuring currencies that rely on energy imports: Japan's reliance on the Strait of Hormuz for about one-third of its energy imports caused the yen to fall over 1%;
The euro also fell 1%, reaching a more than one-month low.
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<h2>High Oil Prices May Create a Self-Reinforcing Cycle for the Dollar</h2>
From a macro perspective, the actual impact of this oil price shock remains relatively mild. Barclays economists estimate that every sustained increase of $10 per barrel in international oil prices could drag global economic growth down by up to 0.2 percentage points. On Monday, Brent crude oil rose by $5 to $77 per barrel, and the direct impact on the real economy remains manageable, with particularly limited negative effects on U.S. demand. <img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/39e0ec03-b588-4228-95e1-798ee6afddeb.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/39e0ec03-b588-4228-95e1-798ee6afddeb.png"/>
From an inflation perspective, this provides additional support for the dollar. The core inflation rate in the U.S. is currently still above 3%, and the rise in oil prices further strengthens the Federal Reserve's rationale for maintaining high interest rates this year, thereby consolidating the dollar's interest rate advantage.
However, this transmission mechanism carries potential risks. Barclays' empirical rule shows that for every $10 per barrel increase in oil prices, the dollar appreciates by about 0.5% to 1.0%. This means that if energy prices denominated in dollars continue to rise, pushing the dollar exchange rate up, it will simultaneously exacerbate the energy shock faced by overseas economies and further depress their currencies, creating a self-reinforcing cycle of &#34;rising oil prices → strengthening dollar → worsening overseas economies → further strengthening dollar.&#34;
As Mike Dolan noted, this situation does not serve the interests of any party, including Washington itself. One of the core economic agendas of the Trump administration was precisely to correct the long-standing overvaluation of the dollar.
<h2>Goldman Sachs Defensive Portfolio: Short Dollar, Heavy Gold, Yen Recovery Outlook</h2>
In its latest report, Goldman Sachs recommends increasing holdings of the dollar, yen, and gold as a core portfolio to address geopolitical risks. The logic is that: the dollar is expected to strengthen in the short term due to its status as a net energy exporter; although the yen is under pressure due to import dependence, it has room for recovery once conflicts subside; gold has shown the most stability during past geopolitical shocks, highlighting its defensive value.
The Goldman Sachs team judges that the dollar will maintain short-term strength against the backdrop of rising geopolitical risks and lists it as an important consideration for cross-asset allocation. However, forecasts suggest that this strength may be difficult to sustain until the end of the year: the three-month target for the euro against the dollar is 1.18, which is basically flat with the current level; the 12-month target has been raised to 1.25.
In contrast, the yen's situation under the energy shock is more complex. Goldman Sachs' three-month forecast for the dollar against the yen is 160, indicating that the yen will further weaken from the current level of 156.1, reflecting the short-term pressure caused by its dependence on energy imports—about one-third of Japan's energy imports must pass through the Strait of Hormuz, and soaring oil prices directly impact its trade balance
In the six geopolitical events analyzed in the report, the average return rate of the Japanese yen was -1%, with a hit rate of only 33%, underperforming other safe-haven assets. However, as the impact of the conflict diminishes, the yen may gradually recover, with a 12-month target falling back to 155. This is precisely the core logic behind Goldman Sachs including it in their overweight portfolio: short-term pressure does not change its long-term allocation value, but investors need to carefully distinguish its differentiated performance from other safe currencies under energy shocks.
Among the three major safe-haven assets, gold's defensive value is considered the most certain. Goldman Sachs explicitly lists it as a core defensive tool under geopolitical risks, assigning an overweight rating. The report shows that the current spot price of gold is approximately $5,254 per ounce, with a 12-month target price of $5,565, corresponding to an upside potential of about 5.9%.
This judgment is based on gold's stable performance during past geopolitical shocks: in the six major events analyzed in the report, the average return rate of gold was positive 3%, with a hit rate as high as 67%, making it the most robust category among all safe-haven assets. In the current environment of rising stock drawdown risks, increasing gold holdings can help effectively smooth portfolio volatility

The US-Iran conflict has triggered a rise in the dollar, but this round of appreciation is not a return of risk aversion; rather, it is a "passive benefit" under the reshaping of the energy landscape: as a net oil exporter, the United States sees its trade conditions improve, while import-dependent currencies like the yen and euro are generally under pressure due to energy reliance. Goldman Sachs recommends increasing holdings in the dollar, yen, and gold to build a defensive portfolio, with gold's defensive value being the most certain, while the strength of the dollar and yen relies more on short-term geopolitical risk aversion demand

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