Gold Weakens as US-Iran Tensions Fuel Oil Surge and Lift Yields
Gold prices fell more than 2% on Thursday (March 26) to trade around $4,470 per ounce, near their lowest level since early January. The decline occurred as US-Iran tensions escalated, pushing up oil prices, rekindling inflation concerns and causing investors to abandon hopes of a US interest rate cut this year.
Iran reiterated that no negotiations were underway with Washington. However, US President Donald Trump stated that Iran was “begging” for a deal, although he also questioned whether the US was still “willing” to make one at this time. These conflicting messages added to uncertainty and sent markets back on the defensive.
Amidst this situation, the US dollar and US Treasury yields strengthened as investors assessed the risk of rising inflation and a longer-term tight monetary policy path. The market now rates about a 38% probability of a rate hike by December, and a 93% chance of leaving rates unchanged at the Fed’s April meeting. Only around 3% of market participants still expect an interest rate cut in December—a sharp reversal from pre-conflict expectations, which had previously predicted at least two cuts in 2026.
Source: Newsmaker.id
