Gold Dips Sharply

RunWithRugs · 2026-03-25T17:14:16+00:00

Gold prices fell over 2% due to heightened military tensions in the Middle East and expectations of interest rate hikes. This decline marks an ongoing trend, with gold dropping 11% last week and reflecting weakened investor demand for safer assets.

RunWithRugs

2026-03-25 17:14:16

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(MENAFN) Gold prices plunged over 2% per ounce on Monday as rising military frictions in the Middle East intensified worries about inflation.

The precious metal fell beneath $4,400 per ounce amid growing expectations of global interest rate increases, driven by continuing military confrontations in the region. These clashes followed the joint US and Israeli strikes on Iran on Feb. 28 and Tehran’s subsequent counterattacks.

Last week, gold had already dropped by more than 11%, reaching its lowest value since Jan. 2 as of Monday.

At the beginning of 2026, gold was trading at $4,321 per ounce before climbing to a record peak exceeding $5,600 on Jan. 29.

The US and Israeli operations in Iran have now entered their fourth week, while oil prices remain above $100 per barrel, prompting a shift in market expectations from rate reductions to rate hikes.

Investor demand for gold has weakened among those seeking higher yields. The metal has faced significant selling pressure over the past fortnight amid the ongoing conflict, narrowing its year-to-date gains to merely $20.

Silver mirrored gold’s decline, falling over 3% per ounce and slipping below $65.

Tehran declared that it would target regional energy and water infrastructure in retaliation for threats by US President Donald Trump, pushing risk sentiment in markets to a peak.

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