TLDR
- Gold futures plummeted over 7% Thursday, settling at $4,558 per ounce, while silver tumbled more than 9%.
- The Federal Reserve maintained its benchmark rate at 3.5%–3.75% and indicated a more hawkish outlook with fewer anticipated cuts.
- Iran conducted strikes targeting energy facilities across the Middle East following Israel’s attack on the South Pars gas field.
- Major mining companies such as Freeport-McMoRan, Newmont, and Royal Gold experienced significant premarket losses.
- Market participants now anticipate the Fed won’t reduce rates before September, strengthening the dollar and weighing on precious metals.
The precious metal experienced one of its steepest declines in recent history Thursday, as market participants balanced the prospect of extended elevated interest rates against 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
Continuous gold futures plunged more than 7% during early market hours, reaching $4,558 per ounce—a substantial $289 decline. By 8:36 AM ET, spot gold had retreated 4.3% to $4,609.02 per ounce. Silver futures experienced an even sharper 9.3% decline, with spot silver plummeting 11% to $67.17 per ounce.
The massive selloff drove gold significantly beneath the $5,000-per-ounce threshold it had maintained for approximately one month.
Federal Reserve Maintains Rates, Adopts Hawkish Tone
The Federal Reserve maintained its current interest rate policy Wednesday, preserving the 3.5%–3.75% range. Fed Chair Jerome Powell highlighted increasing inflationary pressures and indicated the central bank would pursue “a meaningful amount of movement toward fewer cuts.”
Robust U.S. producer price inflation figures released Wednesday intensified market concerns. Investors responded by delaying their rate cut expectations to September or later, based on CME FedWatch analysis.
Gold generates no yield, making it less attractive when interest rates remain elevated. Market participants typically rotate capital into yield-generating instruments during such periods.
“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 characterized the current environment as a critical “test” for gold, though he refrained from declaring this a definitive price floor.
Iranian Attacks Disrupt Energy Markets
Gold’s decline coincided with a substantial surge in crude oil prices. Brent crude futures soared 6.3% following Iran’s overnight strikes against critical energy infrastructure throughout the Middle East.
Tensions intensified Wednesday after Israel targeted South Pars, recognized as the planet’s largest natural gas field. Iran retaliated with assaults on numerous regional energy installations while 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 costs.
Elevated crude prices are widely viewed as inflationary, diminishing prospects for 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 emphasized that safe-haven capital flows into gold are “being offset by the drag from rising real yields.”
Equities of precious metals mining companies also declined during premarket hours. Freeport-McMoRan retreated 4.4%, Newmont tumbled 7.6%, and Royal Gold slipped 4.6%.
The U.S. dollar gained strength amid expectations of prolonged elevated rates, creating additional pressure on gold, which trades in dollar denominations.
CME FedWatch analytics indicated market participants are not anticipating rate reductions before September, representing a delay from prior forecasts.
