Gold slides toward $4,100 as dollar strengthens amid Iran war fears, rate-rise bets

2026-03-23 - 14:11

Gold slid as much as 8.8% to around $4,100 per ounce on Monday, erasing all of its gains for the year and extending its losing streak to a ninth consecutive session, as the war in the Middle East fanned inflation expectations and raised bets on interest-rate increases, while a stronger dollar added further pressure on the metal. The decline capped gold’s steepest weekly fall since 1983. Silver fell more than 10% at one point during trading before paring losses. The conflict, which erupted on 28 February, has pushed oil prices higher, prompting expectations that the US Federal Reserve and other central banks will raise borrowing costs — a headwind for non-yielding gold. Spot gold was down 5.7% at $4,249.71 per ounce as of 08:12 a.m. London time, while silver fell 4.5% to $64.93. Platinum and palladium also declined, while the Bloomberg Dollar Spot Index, a measure of the greenback’s strength, rose 0.3%. Over the weekend, US President Donald Trump gave Iran a two-day ultimatum to reopen the Strait of Hormuz or face strikes on its power stations. Iran responded by threatening to close the strategic waterway “completely” and to target energy, information-technology and water-desalination infrastructure if its electricity facilities came under attack. Trump’s warning was issued at 7:44 p.m. New York time on Saturday. Wayne Gordon, investment adviser at UBS Group’s wealth management unit, said the scale of gold’s decline was not unprecedented, but that “the pace of this decline has been much faster than many historical instances.” David Wilson, director of commodities strategy at BNP Paribas, said gold’s reaction to the current macroeconomic shock had clear market precedent. “If we look at the three previous economic shock cycles — in 2008, 2020, and 2022 — gold initially fell in reaction to the news, as investors typically sold assets to hold U.S. dollars,” he said, adding that all three periods were followed by sustained rallies. Much of the decline over the three weeks since the war began has been driven partly by forced selling, as investors sought to cover losses elsewhere in their portfolios. The metal closed last year at $4,319.37 per ounce. Gold’s 14-day relative strength index, a momentum measure, continued to fall below the 30-point threshold that some traders view as signalling oversold conditions. US government data released on Friday showed that hedge funds and other large speculators raised their net long positions in gold to a seven-week high as of 17 March.