Despite rising a couple of days ago, gold is set for its biggest monthly slump in nearly two decades. Fading expectations of interest rate cuts around the world, coupled with rising energy costs and a stronger dollar due to the Middle East conflict, weighed on the yellow metal’s demand.
While spot gold rose 1.1% to USD 4,559.46 per ounce, hitting its highest since March 20, US gold futures for April delivery gained 0.7% to USD 4,588. However, it was still not enough to offset the bullion’s more than 13% decline in March, putting it on track for its steepest fall since October 2008.
“You could probably describe the recovery we’re seeing in gold as something of a dead cat bounce, which is to say not much of a bounce at all. If indeed (US President) Donald Trump can exit himself from what could become a very protracted event, then we could see oil and the dollar coming off, which would be gold positive. But we’re not in that position yet,” independent analyst Ross Norman told Reuters.
The dollar, on the other hand, headed for its biggest monthly gain since July 2025, making greenback-priced bullion more expensive. The month-long Middle East war has already sent oil prices surging, raising the risk of global recession, as the global energy trade through the vital Strait of Hormuz remains disrupted, with no conflict resolution on the horizon so far.
Discussing gold, the go-to hedge against inflation and geopolitical risks, it has fallen more than 14% since the war began on February 28, as rising expectations of a hawkish monetary policy outlook weighed on the non-yielding metal.
According to CME Group’s FedWatch Tool, money market participants have completely priced out any chance of a Federal Reserve interest rate cut in 2026 from about two cuts expected before the conflict.
Goldman Sachs, however, expects gold prices to reach USD 5,400 per troy ounce by the end of 2026, as the financial giant still sees two US interest-rate cuts this year.
Meanwhile, spot silver rose 4.2% to USD 72.90 per ounce, while spot platinum gained 0.9% to USD 1,916.70, and palladium went up 2.8% at USD 1,445.71.