The relationships between asset classes are not broken. They are just less reliable than most assume.
The first months of 2026 produced some of the sharpest cross-asset moves since the days when we had to wear masks and keep a two-meter space between each other. Geopolitical uncertainty in the Middle East sent oil prices surging, equity markets into retreat, and safe-haven assets sharply higher, all within the same session. What followed was equally instructive: when tensions showed early signs of easing, the reversals were just as fast and just as broad.
What both of these episodes illustrated is that in today’s market, a shock does not stay where it lands. It transmits across asset classes faster and more simultaneously than most cross-asset frameworks are built to handle.
Oil as the transmission catalyst
Fear, more than supply and demand, drove Brent crude sharply higher in early March as geopolitical tensions escalated in the Middle East. Concerns over disruption to key shipping routes amplified the move, and the effect did not remain confined to oil.
Equities were sold off broadly, with the most energy-sensitive sectors, automotive, airlines, and transportation, hit hardest. Technology and AI names, among the heaviest energy consumers, also came under pressure. The cross-asset transmission was immediate: an oil shock became an equity shock within the same session.
When de-escalation signals emerged, the reversal was equally rapid. The Dow, the S&P 500, and the Nasdaq surged. Then the European benchmarks, FTSE 100, CAC 50, and DAX, followed suit. Asian markets staged a similar recovery.
The speed of both the sell-off and the recovery underlines the point. In a market this interconnected, the direction of oil is not a single asset question. It is a cross-asset question.
Gold’s dual role and where it gets complicated
Gold broke above US$5,000 for the first time earlier this year, driven by the same geopolitical stress that moved oil. But bullion’s behaviour in this environment is more nuanced than a straightforward safe-haven story.
Physical demand accelerated as central banks continued expanding their gold reserves. Inflows into ETFs reached record levels, US$5.3 billion in February alone, bringing global assets under management to US$701 billion. Mining equities followed, with major producers posting gains as the metal pushed higher.
At the same time, gold’s relationship with the dollar, traditionally inverse, has become less predictable. When safe-haven flows and energy dynamics push the dollar higher simultaneously, gold can hold its ground or rise alongside it, defying the usual correlation. During acute risk-off episodes, gold can also fall alongside equities as liquidity pressure forces broad position reduction.
The practical implication is that gold’s cross-asset behaviour in 2026 depends heavily on what is driving the move. A geopolitical shock, a policy repricing, and a liquidity stress event can all lift or weaken gold, but through different mechanisms and different cross-asset implications.
FX: Where multiple forces converge
This year’s currency markets are absorbing cross-asset pressure from multiple directions. The dollar’s safe-haven role remains intact, strengthened on geopolitical stress, as it typically does. But the US’s position as a net energy exporter added a second tailwind, reinforcing dollar strength through a channel that did not exist in previous cycles. The result was a dollar move that looked larger than the safe-haven dynamic alone would explain.
Other currencies reflected their own energy sensitivities. The Canadian dollar gained on oil strength, supported by Canada’s status as a net energy exporter. The Swiss franc held firm as a traditional safe haven. On the other side, the euro showed sensitivity to the oil move in ways that reflected structural energy dependence rather than risk sentiment alone.
Quoc Dat Tong, senior financial markets strategist at Exness, said…
“What we are seeing is cross-asset transmission that is faster and less predictable than the historical frameworks suggest.
“The correlations between oil, gold, equities, and FX are real and structurally important, but they are conditions. When multiple pressures are active simultaneously, the same relationship can behave very differently depending on which force is dominant.”
What this means for cross-asset strategy
The events of early 2026 are not anomalies to be absorbed and moved past. There is a preview of the environment that is likely to persist: one where macro shocks transmit rapidly across asset classes, where correlations shift depending on the dominant pressure, and where understanding the connection between markets matters as much as understanding any individual one.
The traders navigating this environment most effectively are those who are not only tracking what assets are doing but also looking at what is driving the connections between them. When oil moves, the question is not only what that means for energy stocks. It is what it means for inflation expectations, the dollar, and gold, and which of those relationships is likely to hold or break, given everything else that is happening at the same time.
In a market this interconnected, cross-asset awareness is not a supplementary skill. It’s the primary one.
Press Release