Key Highlights
- The precious metal plummeted more than 7% Thursday, reaching $4,558 per ounce, while silver declined over 9%.
- Federal Reserve officials maintained interest rates between 3.5%–3.75% and indicated reduced expectations for future rate reductions.
- Iranian forces targeted energy facilities throughout the Middle East following Israeli operations at the South Pars facility.
- Shares of major mining companies like Freeport-McMoRan, Newmont, and Royal Gold declined in premarket sessions.
- Market participants now anticipate the Fed will postpone any rate reductions until September at minimum, strengthening the dollar and weighing on gold.
The yellow metal experienced one of its most dramatic single-session declines in months on Thursday, as market participants balanced concerns about extended elevated borrowing costs with escalating tensions in the Iran-Israel conflict.
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
Futures contracts for gold tumbled over 7% to $4,558 per ounce during morning hours, representing a $289 decline. Spot prices decreased 4.3% to $4,609.02 per ounce as of 8:36 AM Eastern Time. Silver futures plunged 9.3%, while spot silver retreated 11% to $67.17 per ounce.
The dramatic selloff drove the precious metal significantly beneath the $5,000-per-ounce threshold it had maintained for approximately four weeks.
Federal Reserve Maintains Current Policy Stance
The central bank maintained its current interest rate policy Wednesday, preserving the 3.5%–3.75% target range. Chairman Jerome Powell referenced increasing inflationary pressures and indicated expectations for “a meaningful amount of movement toward fewer cuts.”
Robust producer price data from the United States released Wednesday intensified downward pressure on gold. Financial markets reacted by delaying anticipated rate reduction timelines to September at the soonest, based on CME FedWatch projections.
Gold generates no yield, making it less attractive during periods of sustained high interest rates. Capital typically flows toward yield-generating investments in such environments.
“Fed rate cuts have been pushed out further in the future,” said Adrian Ash, a researcher at BullionVault. “Mechanically, that would be bad for gold.”
Ash characterized the present situation as a “test” for the precious metal, though he refrained from declaring a definitive price floor.
Iranian Operations Disrupt Energy Infrastructure
The decline in precious metal values coincided with significant gains in crude oil markets. Brent crude contracts surged 6.3% following Iranian operations targeting critical energy installations throughout the Middle East during overnight hours.
Tensions intensified Wednesday after Israeli forces conducted operations at South Pars, recognized as the planet’s most extensive natural gas field. Tehran retaliated with coordinated strikes on numerous energy facilities regionally while maintaining operations against Israeli positions.
The Strait of Hormuz, an essential corridor for international petroleum and natural gas transport, has been functionally blocked, creating additional upward momentum for energy commodity prices.
Elevated crude prices contribute to inflationary dynamics, diminishing prospects for imminent Federal Reserve policy easing.
OCBC analysts wrote in a note: “The market is effectively trading less on geopolitical hedging demand and more on the worries of higher inflation risks delaying Fed cut trajectory.”
They added that safe-haven flows into gold are “being offset by the drag from rising real yields.”
Equity valuations for precious metal extraction companies also declined during pre-opening trading sessions. Freeport-McMoRan decreased 4.4%, Newmont retreated 7.6%, and Royal Gold slipped 4.6%.
The greenback appreciated amid expectations for prolonged elevated rates, creating additional resistance for gold, which trades in dollar denominations.
CME FedWatch indicators revealed market participants anticipating zero rate adjustments before September, extending previous forecasts.
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