--- title: "The escalation of tensions between the U.S. and Iran has sparked inflation concerns, causing gold to plummet by nearly 4%, almost erasing its annual gains" type: "News" locale: "en" url: "https://longbridge.com/en/news/280086520.md" description: "As the Middle East war enters its fourth week, both the U.S. and Iran are threatening each other, causing gold prices to plummet nearly 4%, nearly wiping out the annual gains, with a low of $4,320.30 per ounce. The surge in oil prices exacerbates inflation risks and weakens the prospects for a Federal Reserve interest rate cut, leading to a decline in gold for eight consecutive trading days, marking the largest weekly drop since 1983. Analysts believe that gold is expected to rebound in the short term, with the key being whether Trump follows through on his threats against Iran" datetime: "2026-03-23T02:48:04.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/280086520.md) - [en](https://longbridge.com/en/news/280086520.md) - [zh-HK](https://longbridge.com/zh-HK/news/280086520.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/280086520.md) | [繁體中文](https://longbridge.com/zh-HK/news/280086520.md) # The escalation of tensions between the U.S. and Iran has sparked inflation concerns, causing gold to plummet by nearly 4%, almost erasing its annual gains According to Zhitong Finance APP, as the Middle East war enters its fourth week, both the U.S. and Iran threaten to launch a new round of attacks, leading to a significant drop in gold prices, nearly erasing the gains made this year. Gold prices plummeted by 3.8%, approaching $4,320.30 per ounce, just slightly above the closing level at the end of last year. Since the outbreak of the conflict, rising oil prices have intensified inflation risks and weakened the prospects for recent interest rate cuts by the Federal Reserve and other central banks. This poses a headwind for non-yielding gold, which has seen prices decline for eight consecutive trading days, recently recording the largest weekly drop since 1983. Gold opened with volatile movements, consistent with the overall market performance. After a brief slight increase, oil prices retreated, and the stock market also experienced significant fluctuations. The decline in gold prices over the past three weeks since the war broke out on February 28 is partly due to forced selling by investors to offset losses in other assets within their portfolios. Gold closed at $4,319.37 per ounce at the end of last year. Last weekend, U.S. President Donald Trump issued a two-day ultimatum to Iran, demanding the reopening of the Strait of Hormuz, or else he would bomb its power plants. Iran responded by stating that if its power facilities were attacked, it would "completely" block this strategic waterway and strike at energy, information technology, and desalination infrastructure. Trump's ultimatum was issued at 7:44 PM New York time on Saturday. Capital.com analyst Kyle Rodda stated that due to technical factors, "gold is expected to rebound in the short term." He believes it will largely depend on "whether Trump follows through on his threat to strike Iran's power plants." An indicator measuring momentum, the 14-day relative strength index of gold prices, further fell below the 30 mark, which some traders view as an oversold signal. Data released by the U.S. government last Friday showed that as of March 17, hedge funds and other large speculators had raised their net long positions in gold to the highest level in seven weeks. As of the time of writing, spot gold is down 1.69%, priced at $4,415 per ounce. Silver is down 1.38%, at $66.86. Platinum and palladium also declined. 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