TLDR
- Precious metals experienced a significant downturn, with spot gold declining 4.3% following President Trump’s Middle East address
- The President announced plans to strike Iran “extremely hard” within the coming two to three weeks
- Silver experienced an even steeper 7% decline, with platinum and palladium following suit
- Despite the selloff, UBS continues projecting gold will average $5,000 per ounce in 2026
- The investment bank recommends investors treat any retreat to $4,000 as an accumulation opportunity
Precious metals experienced a dramatic reversal on Thursday following President Donald Trump’s primetime address, which created uncertainty in financial markets regarding the trajectory of Middle East tensions.
Spot gold plummeted by as much as 4.3%, halting a four-session rally. As of 2:12 p.m. Singapore time, the yellow metal was changing hands at $4,562.88 per ounce. Silver experienced an even more severe decline of 7%, sliding to $69.86. Both platinum and palladium recorded losses as well.
During his address, Trump characterized the conflict as approaching its conclusion while simultaneously warning that American forces would target Iran “extremely hard” within the next two to three weeks. The President asserted that military objectives had been largely accomplished and called on allies dependent on Middle Eastern petroleum to contribute to resolving the near-blockade of the Strait of Hormuz.
Prior to the conflict, the Strait of Hormuz served as a critical passage for approximately one-fifth of global oil and liquefied natural gas shipments. Anxiety surrounding energy transportation through this strategic waterway contributed to rising oil quotations.
The US dollar index strengthened by 0.4% in the aftermath of the President’s remarks. Equity markets also retreated as investors reduced their risk exposure.
According to Christopher Wong, a strategist at Oversea-Chinese Banking Corp, Trump’s address “essentially presented the conflict as a military victory narrative, rather than a peace agreement.” Wong observed that gold had touched an intra-day peak of $4,800 earlier, but suggested upward momentum might stall given apprehensions about potential American ground forces entering Iran.
Gold had already endured a challenging March. The precious metal declined almost 12% during that period, marking its worst monthly showing since October 2008. Elevated oil prices sparked inflation worries, which diminished prospects for interest rate reductions and pressured gold valuations.
Prior to the President’s speech, market participants had anticipated the Federal Reserve might lower rates to bolster economic activity if hostilities persisted. That sentiment changed following Trump’s hawkish rhetoric.
With financial markets preparing to close for the Good Friday observance, Wong suggested that traders’ inclination to minimize exposure before the extended weekend was also affecting price action.
UBS Maintains Optimistic Gold Outlook Amid Correction
Notwithstanding the recent decline, UBS remains committed to its constructive gold thesis. Strategist Joni Teves stated in a Thursday research note that the firm interprets the current pullback as a strategic entry point.
UBS made a modest downward revision to its 2026 gold projection, adjusting it to $5,000 per ounce from $5,200, acknowledging the recent retracement from January’s record high. The bank’s 2027 estimate remains unchanged at $4,800, with the 2028 outlook holding at $4,250.
Teves indicated that speculative positioning has been unwound and exchange-traded fund redemptions have been limited, creating capacity for investors to rebuild their allocations. Chinese gold ETFs have continued experiencing net capital inflows, while domestic physical demand has remained robust.
UBS indicated that any decline approaching the $4,000 threshold would represent an attractive opportunity to establish positions.
Silver Price Expectations Reduced
UBS lowered its 2026 silver projection to $91.9 per ounce from $105. Teves highlighted that silver’s dual function as an industrial commodity renders it more vulnerable to any deceleration in worldwide economic expansion.
Spot silver was most recently quoted at $69.86 on Thursday.
