TLDR
- Precious metals experienced dramatic losses Thursday, with gold futures plunging over 7% to $4,558 per ounce and silver tumbling more than 9%.
- The Federal Reserve maintained its interest rate range at 3.5%–3.75% and indicated a reduced likelihood of near-term rate reductions.
- Following Israel’s attack on the South Pars gas facility, Iran retaliated with strikes targeting energy infrastructure throughout the Middle East.
- Major mining companies saw premarket losses, with Freeport-McMoRan, Newmont, and Royal Gold all declining before market open.
- Market expectations now place the earliest potential Fed rate reduction in September, strengthening the dollar and weighing on gold.
Thursday witnessed one of the most severe single-session declines in gold prices in recent history, as market participants grappled with the dual pressures of extended elevated interest rates and escalating hostilities between Iran and Israel.
BREAKING: Spot gold extends its selloff to -$400/oz on the day, now trading at $4,500/oz for the first time since February 2nd. pic.twitter.com/ARqkGaABpz
— The Kobeissi Letter (@KobeissiLetter) March 19, 2026
During early Thursday trading, continuous gold futures plummeted by more than 7%, shedding $289 to reach $4,558 per ounce. By 8:36 AM ET, spot gold had declined 4.3% to $4,609.02 per ounce. The silver market experienced even steeper losses, with futures falling 9.3% and spot prices dropping 11% to $67.17 per ounce.
The dramatic selloff sent gold prices tumbling below the $5,000-per-ounce threshold that had been maintained for approximately one month.
Federal Reserve Maintains Policy, Reduces Cut Expectations
On Wednesday, the Federal Reserve opted to keep interest rates steady within the 3.5%–3.75% band. Federal Reserve Chair Jerome Powell highlighted increasing inflationary pressures and indicated that policymakers would pursue “a meaningful amount of movement toward fewer cuts.”
The pressure intensified following Wednesday’s release of robust U.S. producer inflation figures. Financial markets adjusted their rate cut projections accordingly, with CME FedWatch data showing expectations now centered on September as the earliest possible timing for monetary easing.
As a non-interest-bearing investment, gold typically becomes less attractive in elevated interest rate environments. Market participants frequently rotate toward yield-generating assets during such periods.
“The timeline for Fed rate cuts has been extended considerably,” explained Adrian Ash, a BullionVault researcher. “From a technical standpoint, this creates headwinds for gold.”
While Ash characterized the current situation as a “test” for the precious metal, he refrained from declaring the current price level a definitive bottom.
Iranian Retaliation Disrupts Energy Infrastructure
Gold’s price collapse occurred simultaneously with a significant surge in crude oil values. Brent crude futures advanced 6.3% following Iran’s overnight strikes on critical energy facilities throughout the Middle East region.
Tensions intensified Wednesday after Israeli forces targeted South Pars, recognized as the planet’s largest natural gas field. Iran’s retaliatory response included strikes on numerous regional energy installations, with continued offensive operations against Israeli targets.
The Strait of Hormuz, a vital conduit for international oil and natural gas shipments, has been essentially shut down, creating additional upward momentum for energy commodity prices.
Elevated crude oil prices are widely interpreted as inflationary catalysts, which diminishes prospects for imminent Federal Reserve rate reductions.
OCBC analysts noted in their market commentary: “The market is now prioritizing inflation concerns over geopolitical safe-haven demand, with worries that elevated inflation risks will postpone the Fed’s rate cutting timeline.”
The analysts further observed that traditional safe-haven demand for gold is “facing counterbalancing pressure from increasing real yields.”
Equity prices for precious metal producers also retreated during premarket hours. Freeport-McMoRan declined 4.4%, Newmont shares fell 7.6%, and Royal Gold traded down 4.6%.
The U.S. dollar appreciated in response to the prolonged higher-rate environment outlook, creating additional resistance for gold, which is denominated in dollars.
According to CME FedWatch data, market participants have eliminated expectations for any rate reductions before September, representing a delay from earlier projections.
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