What is the story about?
Prices of Gold in the global markets continue to remain volatile on Monday, March 23, after bullion endured its worst weekly performance in over 40 years. This, despite the US-Iran war showing no signs of de-escalation and entering its fourth week.
Prices continue to drop, declining another 3% on Monday, slipping below the mark of $4,400 an ounce in the spot market. Gold fell 11% in the week gone by, its worst weekly drop since 1983.
Headwinds that are generally negative for risk-on-assets are positive for haven assets like Gold, but that has not been the case during the US-Iran war.
The war in West Asia has disrupted oil flows and potential supply shocks have caused Brent crude to rally over 50% since the start of the month. Rising oil prices have posed inflation risks across the globe, and financial markets, that were pricing in further monetary easing from central banks, are now beginning to price in monetary tightening instead.
Traders are now pricing in at least three rate hikes by the Bank of England and the European Central Bank through the course of the year. The US Federal Reserve, where the market priced in at least three rate cuts for 2026, are now factoring in a 30% probability of a rate hike by October.
Higher interest rates are negative for asset classes like Gold, which are non-interest yielding instruments. The strength in the US Dollar is an added headwind for the US Dollar.
On the charts though, Gold has entered oversold levels, with the 14-day Relative Strength Index (RSI) extending a fall below 30, a level that is considered "oversold".
“Gold is primed for a bounce in the short term” due to technical reasons, said Kyle Rodda, an analyst at Capital.com Inc. Much will depend “on whether Trump follows through with his threats to hit Iranian power plants,” he said.
US President Donald Trump has given a 48-hour deadline for the Strait of Hormuz to be opened completely by Iran without threats, else the US will attack their power plants, to which, Iran, in response, has threatened attacks on every US-Israel-linked energy, IT, and desalination infrastructure in the West Asia region.
Gold prices have dropped for the eighth straight day on Monday.
(With Inputs From Agencies)
Prices continue to drop, declining another 3% on Monday, slipping below the mark of $4,400 an ounce in the spot market. Gold fell 11% in the week gone by, its worst weekly drop since 1983.
Headwinds that are generally negative for risk-on-assets are positive for haven assets like Gold, but that has not been the case during the US-Iran war.
The war in West Asia has disrupted oil flows and potential supply shocks have caused Brent crude to rally over 50% since the start of the month. Rising oil prices have posed inflation risks across the globe, and financial markets, that were pricing in further monetary easing from central banks, are now beginning to price in monetary tightening instead.
Traders are now pricing in at least three rate hikes by the Bank of England and the European Central Bank through the course of the year. The US Federal Reserve, where the market priced in at least three rate cuts for 2026, are now factoring in a 30% probability of a rate hike by October.
Higher interest rates are negative for asset classes like Gold, which are non-interest yielding instruments. The strength in the US Dollar is an added headwind for the US Dollar.
On the charts though, Gold has entered oversold levels, with the 14-day Relative Strength Index (RSI) extending a fall below 30, a level that is considered "oversold".
“Gold is primed for a bounce in the short term” due to technical reasons, said Kyle Rodda, an analyst at Capital.com Inc. Much will depend “on whether Trump follows through with his threats to hit Iranian power plants,” he said.
US President Donald Trump has given a 48-hour deadline for the Strait of Hormuz to be opened completely by Iran without threats, else the US will attack their power plants, to which, Iran, in response, has threatened attacks on every US-Israel-linked energy, IT, and desalination infrastructure in the West Asia region.
Gold prices have dropped for the eighth straight day on Monday.
(With Inputs From Agencies)
