Key Highlights
- Continuous gold futures plummeted more than 7% Thursday, reaching $4,558 per ounce, while silver declined over 9%.
- Federal Reserve maintained its benchmark rate between 3.5% and 3.75%, indicating reduced future rate reductions due to persistent inflation.
- Iranian military forces targeted energy infrastructure throughout the Middle East following Israeli attacks on the South Pars gas field.
- Major mining companies such as Freeport-McMoRan, Newmont, and Royal Gold experienced declines during premarket hours.
- Market participants now anticipate the earliest Fed rate reduction will occur in September, strengthening the dollar and weighing on gold prices.
Precious metals experienced one of their most dramatic single-session declines in months on Thursday, as market participants assessed the implications of sustained elevated interest rates combined with escalating hostilities between Israel and Iran.
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 declined more than 7%, settling at $4,558 per ounce—a substantial $289 decrease. By 8:36 AM ET, spot gold had retreated 4.3% to $4,609.02 per ounce. Silver futures experienced a 9.3% loss, with spot silver declining 11% to reach $67.17 per ounce.
The dramatic selloff drove gold significantly beneath the $5,000-per-ounce threshold it had maintained for approximately four weeks.
Federal Reserve Maintains Current Policy Stance
The Federal Reserve held its benchmark interest rate steady Wednesday, maintaining the 3.5%–3.75% target range. Chair Jerome Powell highlighted increasing inflationary pressures and indicated there would be “a meaningful amount of movement toward fewer cuts.”
Robust U.S. producer inflation figures released Wednesday intensified market concerns. Financial markets adjusted their forecasts, now expecting the earliest potential rate reduction to arrive in September, based on CME FedWatch indicators.
Gold functions as a non-yielding asset, making it less attractive during periods of elevated interest rates. Market participants typically rotate capital into interest-generating investments during such conditions.
“Fed rate cuts have been pushed out further in the future,” noted Adrian Ash, a researcher at BullionVault. “Mechanically, that would be bad for gold.”
Ash described the current environment as a “test” for gold, though he declined to characterize this level as a definitive price floor.
Iranian Attacks Disrupt Energy Markets
The decline in gold prices coincided with a substantial surge in crude oil valuations. Brent crude futures climbed 6.3% following overnight Iranian strikes targeting critical energy infrastructure throughout the Middle East.
Tensions intensified Wednesday when Israeli forces targeted South Pars, recognized as the world’s most extensive gas field. Iran retaliated with coordinated attacks on numerous regional energy facilities while simultaneously continuing operations against Israeli targets.
The Strait of Hormuz, an essential conduit for international oil and gas transportation, has been essentially blocked, creating additional upward momentum for energy commodity prices.
Elevated oil prices contribute to inflationary pressures, which diminishes the probability of imminent Federal Reserve rate reductions.
OCBC analysts observed in a research 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 noted that safe-haven flows into gold are “being offset by the drag from rising real yields.”
Shares of precious metal mining companies declined during premarket trading sessions. Freeport-McMoRan retreated 4.4%, Newmont decreased 7.6%, and Royal Gold lost 4.6%.
The U.S. dollar gained strength following the extended elevated-rate outlook, creating additional pressure for gold, which trades in dollar denominations.
CME FedWatch data revealed traders anticipating zero rate reductions until September at minimum, representing a delay from earlier projections.
