Gold heads for biggest monthly drop in more than 17 years
Gold is typically seen as a hedge against inflation and geopolitical risks, but the conflict-driven surge in energy costs is also raising expectations
31 March, 2026
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Gold rose on Tuesday but stayed on track for its biggest monthly drop in more than 17 years as investors flocked to the dollar as the favoured safe haven amid the Middle East conflict that has raised inflation fears and bets for hawkish monetary policy response.
Spot gold 0.9 per cent to $4,550.68 per ounce by 0727 GMT. US gold futures for April delivery gained 0.5 per cent to $4,580.70.
Bullion has declined more than 13 per cent this month, putting it on track for its steepest decline since October 2008. Prices are, however, up about 5 per cent for the quarter, having scaled a record high of $5,594.82 on January 29. Prices are down 18.70 per cent from record highs.
Read more-Gold climbs more than 2% on softer dollar, easing fears of higher interest rates
“Traders are still seeing gold through the lens of a value investment at these levels, given where the precious metal was trading just a few months ago. So, it’s a combination of falling oil, a dip in the dollar and attractive buying levels, which has propelled gold higher today,” said Tim Waterer, chief market analyst, KCM Trade.
Gold is typically seen as a hedge against inflation and geopolitical risks, but the conflict-driven surge in energy costs is also raising expectations for higher interest rates and boosting the dollar’s appeal as the preferred safe haven.
The dollar was headed for its biggest monthly gain since July, making it as the strongest safe asset, supported by the US status as an energy exporter and investors’ flight to cash over the past month of conflict.
Traders have almost completely priced out any chance of a US rate cut this year from about two cuts expected before the war.
“If the Strait of Hormuz remains closed, oil prices could remain volatile with potential for further upside on supply constraints. So, this high oil story, which has plagued gold prices since the conflict began, hasn’t gone away yet,” Waterer said.
Goldman Sachs, however, said it continues to expect gold prices will reach $5,400 per troy ounce by end‑2026 on central bank diversification and Federal Reserve easing.
Among other metals, spot silver rose 2.7 per cent to $71.89 per ounce, spot platinum gained 1 per cent to $1,917.49, and palladium was up 1.5 per cent at $1,427. All three metals were down about 20 per cent each so far in March.



















