Gold jumps more than 3% as bargain hunters eye Iran war risks
Gold surged after a sharp sell-off, as investors weighed Iran war tensions, oil above $110 and shifting US interest-rate expectations
Global gold prices surged by more than 3% on Friday, March 27, as investors rushed back into the market after this week’s steep pullback, with attention fixed on the escalating conflict in the Middle East and signs of when the Iran war might begin to ease.
Reuters reported that spot gold rose 2.6% to US$4,491.78 an ounce by 1:45pm in New York, after touching an intraday high of US$4,554.39. US gold futures for April delivery settled 2.7% higher at US$4,492.50. The rebound followed a bruising start to the week, when spot gold fell to a four-month low of US$4,097.99 on Monday.
Daniel Pavilonis, senior market strategist at RJO Futures, said the recent sell-off had created an attractive entry point for buyers. He said the market’s slide below its 200-day moving average had opened up what he described as an “excellent” opportunity to buy gold.
Pavilonis said gold could continue to grind higher over the next few weeks. He added that if the Iran situation eventually passes, markets could then be in a position to rotate back into riskier assets.
Oil prices, however, remained above US$110 a barrel, underscoring how deeply the conflict is still affecting global markets. According to the Reuters report, the war has entered its fourth week and has spread across the Middle East, pushing up energy and fertiliser prices and fuelling broader inflation concerns.
That inflation pressure has also reshaped expectations for US monetary policy. Higher inflation would usually be negative for gold because it can push interest rates higher, raising the opportunity cost of holding a non-yielding asset. Markets have now fully priced out any US rate cuts for 2026, a sharp change from before the conflict, when traders had expected two reductions this year.
Even so, Commerzbank has turned more bullish on gold, lifting its year-end target to US$5,000 an ounce from US$4,900. The bank said the recent correction was unlikely to last long and expects the Iran war to end in the spring, which could ease current expectations for tighter US policy. It now sees the Federal Reserve returning to rate cuts later this year, with total reductions of around 0.75 percentage points by the middle of next year.
Other precious metals also moved higher. Spot silver gained 2.2% to US$69.54 an ounce, platinum rose 2.3% to US$1,868.89, and palladium added 1.8% to US$1,377.25.
