Gold Set for Biggest Weekly Drop Since 1983

2026-03-20 15:08 By Joana Ferreira 1 min. read

Gold tumbled 2% to $4,570 per ounce on Friday, on track for its largest weekly decline since 1983, as escalating Middle East tensions sent energy prices soaring and dashed hopes for near-term interest rate cuts.

Prices extended their decline after reports that the Pentagon is deploying three warships and thousands of Marines to the region, prompting traders to price in a 50% chance of a Federal Reserve rate hike by October amid fears of sustained inflation.

The safe-haven metal has fallen every week since the US-Israel strikes on Iran last month, pressured by rising Treasury yields, a stronger dollar, and profit-taking as investors liquidated positions to offset losses elsewhere.

Earlier this week, the Federal Reserve, European Central Bank, Bank of England, and Bank of Japan held rates steady but signaled readiness to tighten policy further if inflationary pressures persist.



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Gold Holds Firm on US-Iran Optimism
Gold traded above $4,800 an ounce on Wednesday after rising about 2% in the previous session, supported by hopes that the US and Iran can strike a deal to end the conflict, easing fears of an energy-led inflation shock. Washington and Tehran are reportedly working to schedule a second round of peace talks in the coming days after last weekend’s negotiations collapsed. The US is continuing its naval blockade of Iranian oil exports in the Strait of Hormuz, while Iran is considering a temporary suspension of shipments through the route to help advance a potential agreement. Meanwhile, crude oil retreated below $90 per barrel and the dollar index slipped to a six-week low, lending further support to gold. Markets have also dialed back hawkish expectations for monetary policy, with the Federal Reserve adopting a wait-and-see stance as it evaluates inflation risks.
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Gold Surges as Iran Talks Weaken Dollar, Ease Inflation Fears
Gold climbed to $4,800 per ounce on Tuesday, its highest level since March 18, as progress in US-Iran negotiations weighed on the dollar and pushed oil prices below $100 a barrel, easing inflation concerns. Although weekend talks failed to yield an agreement and the Strait of Hormuz blockade took effect, US officials signaled plans for further negotiations before the two-week ceasefire expires. The dollar fell to a one-month low, and crude prices retreated on hopes for a longer-term deal, reducing fears of sustained inflation and rate hikes. Markets now price in a nearly 30% chance of a Fed rate cut this year. Despite the rally, gold remains about 10% below its pre-conflict level.
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Gold Edges Higher as More US-Iran Talks Eyed
Gold climbed toward $4,800 per ounce on Tuesday, rebounding from the previous session’s losses as the US and Iran signaled willingness to resume negotiations aimed at securing a longer-term ceasefire before the current two-week truce lapses. President Donald Trump said Tehran had reached out to Washington just hours after the US initiated a naval blockade on Iranian oil shipments in the Strait of Hormuz. Iranian President Masoud Pezeshkian also indicated readiness to continue peace discussions, provided they remain within the framework of international law and regulations. Oil prices retreated on hopes for a potential longer-term deal, easing inflationary concerns and tempering expectations that central banks will keep interest rates on hold or even hike them. Despite the uptick, gold is still down roughly 10% since the conflict began.
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