The worst monthly performance in 17 years? Gold is experiencing its "darkest hour" since 2008!

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Source: Jin Ten Data

Affected by the U.S.-Iran conflict and a shift in macroeconomic logic, international gold prices in March 2026 recorded their worst month in nearly 17 years. Although gold prices rebounded slightly on March 31, it has still been difficult to reverse the overall downward trend.

As of 15:30 Beijing time on March 31, spot gold was priced at $4,553.69 per ounce, but this month’s cumulative drop in gold prices has already reached 14.6%. This figure represents the largest single-month decline since October 2008 (when the drop was 16.8%).

Currently, the U.S.-Iran war has entered its fifth week, and a high level of uncertainty over the situation is weighing on the market. According to a report by The Wall Street Journal on Monday evening, U.S. President Trump has told his aides that even if the Strait of Hormuz remains under widespread blockade, he is willing to end U.S. military operations against Iran.

Trump said on social media that Washington is having “serious discussions” with Iranian officials. But he also issued a threat: if an agreement cannot be reached, the U.S. military will launch attacks on Iran’s power plants, oil wells, and the key Kharg Island. In addition, U.S. Secretary of State Rubio (Marco Rubio) claimed in an interview with Al Jazeera that the United States’ military targets in Iran will be completed “within weeks rather than months.” Currently, including 2,500 U.S. Marines, such as the 82nd Airborne Division, have arrived in the Middle East.

Why hasn’t the fighting in the Middle East been able to continue supporting gold prices? Analysts believe that the war has pushed up oil and gas prices, triggering concerns in the market about a spike in inflation, which in turn has strengthened expectations for global central banks to raise interest rates.

Wayne Nutland, investment manager at Shackleton Advisers, said that the gold trading logic of the past four years is being restructured. Before the Ukraine conflict, gold prices and real bond yields and the U.S. dollar typically had a negative correlation. Although this relationship had temporarily become disconnected at some point from 2025 to early 2026, after the outbreak of the U.S.-Iran war, gold has returned to its traditional logic.

“As bond yields and the dollar both rise, gold prices once again show sensitivity to these indicators. Earlier, gold prices ran too high at the beginning of 2026, and some investors also developed a strong willingness to lock in profits,” Nutland said.

Iain Barnes, Chief Investment Officer at Netwealth, believes that excessive participation by financial investors has pushed recent gold price volatility to twice the historical level.

Barnes pointed out that although central banks of various countries previously opened the door to a bull market by increasing their holdings of gold for dedollarization, as market uncertainty has grown and the dollar has rebounded, financial buyers have started to run out—replaced by large-scale profit selloffs. He drew a comparison between the current situation and 2008: at that time, investors had overbet on commodity markets amid a weakening dollar, and as the global financial crisis spread, risk-averse sentiment led to tightened liquidity, causing gold prices to be hit hard alongside commodities such as crude oil and copper.

“This year, the market has once again found that investors’ exposure to gold has become overly concentrated,” Barnes said. “Gold was previously seen as the last refuge for safety, but now it is facing a liquidation after overcrowding.”

Despite the market experiencing a sharp pullback, Goldman Sachs still remained optimistic about the outlook for gold in its report on Monday. Although the market has revised this year’s Fed rate-cut expectations down to just one time, or no cuts at all, Goldman Sachs still maintains its forecast that gold prices will reach $5,400 by the end of 2026.

Goldman Sachs analysts said: “We believe the demand for central banks to diversify their asset allocations is still ongoing, and at present, our speculative positions have returned to normal. Although continued turmoil in the Strait of Hormuz in the short term may trigger further risk of liquidations, in the medium to long term, the U.S.-Iran situation and broader geopolitical developments will accelerate central banks’ allocation to gold, and prompt the market to reassess the sustainability of Western fiscal policy—thereby providing support for gold prices.”

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责任编辑：Zhu Huanan