Gold retreats as dollar strengthens and inflation worries rise
Gold fell as the dollar strengthened and rate expectations rose, while the US-Israel-Iran conflict fuelled inflation worries through surging oil prices
Global gold prices weakened overnight as they came under pressure from a stronger US dollar and expectations of higher interest rates, while fears of rising inflation intensified after the war involving the United States, Israel and Iran sent oil prices sharply higher.
Reuters reported that gold fell by more than 1% on Monday (March 9), pressured by the firming US dollar and expectations that interest rates could remain higher for longer, as the conflict in the Middle East added to concerns over inflation.
Spot gold fell 1.5% to US$5,091.62 an ounce as of 1.40pm New York time (5.40pm GMT). US gold futures for April delivery closed 1.1% lower at US$5,103.70.
Jim Wyckoff, senior analyst at Kitco Metals, said inflation concerns and expectations of higher interest rates, driven by uncertainty surrounding the war, were weighing on gold prices. At the same time, however, the prolonged conflict was expected to continue supporting demand for safe-haven assets, helping to prevent gold from falling much further.
Gold is often viewed as a hedge against inflation, but lower interest rates generally enhance its appeal because it is a non-yielding asset.
The US dollar strengthened while oil prices surged towards US$120 a barrel, prompting investors to rush into cash amid fears that a prolonged war in the Middle East could severely disrupt energy exports and undermine global economic growth. A stronger dollar also makes gold, which is traded in the US currency, more expensive for holders of other currencies.
US-Israel-Iran war drags on
The Israeli military said it had launched operations in central Iran and had also struck Beirut, the capital of Lebanon. The war has effectively forced the closure of the Strait of Hormuz, off the coast of Iran, a vital shipping route for oil and liquefied natural gas that carries around one-fifth of the world’s seaborne supply.
On the economic front, the US Consumer Price Index (CPI) for February is due to be released on Wednesday, while the Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation gauge, is scheduled for Friday.
“If we see hot inflation numbers this week, that would put the Fed in a bind and could send gold prices down further,” Wyckoff said.
The Fed’s next policy meeting will take place on March 17-18, with markets widely expecting the central bank to leave interest rates unchanged.
Among other precious metals, spot silver fell 0.2% to US$84.18 an ounce, platinum rose 1.1% to US$2,158.02, and palladium gained 2.4% to US$1,663.79.
Tuesday morning update (March 10, 2026)
Bloomberg reported that spot gold was little changed at US$5,139.67 an ounce as of 7.06am Singapore time. Silver rose 0.3% to US$87.25, while platinum and palladium edged slightly lower. The Bloomberg Dollar Spot Index eased marginally after dropping 0.2% in the previous session.
Gold steadied after the US dollar weakened, following remarks by President Donald Trump suggesting that the war in the Middle East could be nearing an end.
Bullion traded near US$5,140 an ounce in Tuesday morning dealings after falling 0.6% in the previous session, after Trump said he believed the conflict with Iran would be resolved “soon”. The dollar index slipped a further 0.1%, extending Monday’s decline, while oil prices tumbled after a period of intense volatility.
