The gold price has experienced its steepest weekly decline in more than 40 years, dropping as low as US$4,100 per ounce in early morning trading on Monday (March 23).
The yellow metal’s safe-haven status has lost its edge in the face of an unprecedented storm of macroeconomic and geopolitical factors. The price of silver has also taken a big hit, sliding down to an intraday trading low of about US$61 per ounce — the white metal has lost about half of its all-time high posted just eight weeks ago.
Silver often reacts with greater intensity than gold given it’s a much smaller market and more tied to industries that can be negatively impacted by blows to sectors like solar panels, artificial intelligence infrastructure and electronics.
At the center of this storm is the US-Iran war and the closure of the Strait of Hormuz, which has sent Brent crude oil prices well above US$100 per barrel. With global inflation fears now supercharged, the US Federal Reserve last week signaled that interest rates may stay higher for longer, putting the kibosh on previous expectations for 2026 cuts.
As the US dollar is also the petrodollar, the greenback has soared. This makes gold and silver more expensive for global buyers, especially in China and India. At the same time, 10 year treasury yields are rising higher, which also lessens the investment appeal of non-yielding assets like gold and silver bullion.
Global stock markets are also being rocked by uncertainty in the Middle East, sparking massive selloffs in equities. In this scenario, institutional investors often sell liquid assets like precious metals to raise cash and cover margin calls.
Do gold and silver prices have further to fall?
“In my view, gold continues to maintain strong structural bullish momentum supported by solid fundamental drivers, most notably ongoing global economic uncertainty and rising institutional demand for hedging,” stated Rania Gule, senior market analyst at XS.com, in market commentary shared with the Investing News Network (INN).
“However, this momentum does not move in a straight line; it is often interrupted by sharp corrections that are necessary to rebuild long positions,” the expert added.
Gule believes that a deeper correction toward US$3,800 is not outside the realm of possibility. The odds are higher if bond yields continue to rise and the dollar’s strength persists. However, she does not believe such a move would be a bearish signal, but rather an opportunity for investors who believe in gold’s long-term story.
“In the short term, particularly over the coming week, I lean toward a consolidation scenario with a slight bearish bias, especially in the absence of new catalysts to support further upside,” said Gule.
“This does not imply a lack of opportunities; on the contrary, such market conditions can provide favorable setups for short-term traders, provided they apply disciplined risk management. For medium- to long-term investors, however, the focus should remain on the broader trend rather than short-term fluctuations.”
Both gold and silver prices recovered slightly on Monday as US President Donald Trump stated that his team had “productive conversations regarding a complete and total resolution of our hostilities in the Middle East,” leading him to “postpone any and all military strikes against Iranian power plants and energy infrastructure” for at least five days.
As of 9:00 a.m. PST, gold was trading at US$4,373.11, while silver was trading at US$68.39.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
