Photo courtesy of Anadolu.
Gold prices dropped sharply in March, reversing earlier gains as global financial pressures intensified amid the ongoing Middle East conflict.
The precious metal fell by 11.3 percent during the month, marking its steepest decline since the 2008 global financial crisis. Analysts linked the drop to a mix of rising bond yields, a stronger US dollar, and shifting investor sentiment.
The downturn came after gold posted strong gains at the start of the year, climbing 12.42 percent in January and 8.9 percent in February, extending a multi-month rally.
However, escalating geopolitical tensions pushed oil prices higher, fueling inflation concerns and prompting expectations that the US Federal Reserve may hold interest rates steady instead of cutting them.
Higher bond yields increased the opportunity cost of holding nonyielding assets such as gold, leading investors to reduce their positions. At the same time, demand for the US dollar as a safe-haven asset strengthened, further pressuring gold prices.
Gold prices fell to $4,099.52 per ounce in March, their lowest level since November 2025. Central bank selling also contributed to the decline.
Ole Hansen of Saxo Capital said the drop was driven by a combination of macroeconomic factors, including repricing of rate expectations, rising energy costs, and stronger dollar demand, which weakened gold’s appeal as a traditional safe haven.
He added that in periods of market stress driven by liquidity needs rather than systemic financial risks, gold is often sold to cover losses elsewhere, leading to declines despite heightened uncertainty.
