$XAUUSD Gold Prices Fall Amid Inflation Concerns, Oil Prices Break Past US$ 100

Global gold prices weakened on Monday (16/3/2026) amid rising concerns about global inflation.

The surge in oil prices due to Middle East conflict is seen as potentially holding back central banks, including the Federal Reserve, from cutting interest rates in the near term.

Spot gold prices fell 0.3% to US$ 5,001.61 per ounce at 11:10 GMT. Meanwhile, US gold futures contracts for April delivery plunged 1.1% to US$ 5,007.20 per ounce.

Natixis analyst Bernard Dahdah said the gold market's focus has now shifted from the impact of trade disruptions in the Strait of Hormuz to potential long-term inflation.

"Higher oil prices mean inflation is rising. This could cause the Fed to halt interest rate cuts," he said.

The surge in oil prices is the main factor pressuring gold. Oil prices are holding above US$ 100 per barrel, up more than 40% so far this month and reaching the highest level since 2022.

The increase was triggered by escalating geopolitical tensions after US (US) and Israeli attacks on Iran led Tehran to halt oil shipments through the Strait of Hormuz, a vital shipping lane for global energy trade.

US President Donald Trump was even reported to have spoken with seven allied nations to help secure the passage, after Iranian attacks on ships in the region have continued.

The conflict between the United States and Israel with Iran has now entered its third week.

On the monetary policy side, market attention is also focused on the two-day Federal Reserve meeting taking place this week. The US central bank is widely expected to maintain interest rates at current levels.

Several other major central banks will also hold policy meetings at the same time, including the European Central Bank, Bank of England, and Bank of Japan.

Investors await policymakers' views on the Iran war's impact on inflation, economic growth, and the direction of future monetary policy.

In its note, UBS analysts estimate that central banks will still be cautious about inflation risks without directly and aggressively raising interest rates.

However, UBS also believes that a prolonged conflict between the US and Iran could potentially weigh on the global economy. Such conditions could ultimately increase demand for gold as a hedge.

Meanwhile, other precious metals moved mixed. Spot silver fell 2.1% to US$78.86 per ounce. In contrast, platinum rose 2.6% to US$2,076.23 per ounce, while palladium fell slightly 0.3% to US$1,547.14 per ounce.