Gold prices fell on Monday, as a surge in energy prices fuelled inflation worries and dampened expectations for US Federal Reserve interest rate cuts this year.
Spot gold fell 0.6 per cent to $4,466.99 per ounce as of 0238 GMT. US gold futures for April delivery shed 0.6 per cent to $4,496.30.
Gold has lost more than 15 per cent so far this month, marking its steepest monthly decline since October 2008, as the US dollar strengthened. The currency has gained more than 2 per cent since the US-Israeli war on Iran began on February 28.
“The bigger macro picture behind that (gold’s) underperformance is the huge shift in interest rate expectations... The USD has picked up on that, and as gold’s outlook was likewise rate-dependent, largely with expectations that the policy rate would fall under a new Federal Reserve chair, which has worked against gold,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.
No more rate cut expectations
Traders now see little chance of a US rate cut this year, as higher energy prices threaten to feed into broader inflation and limit scope for monetary easing. That contrasts with expectations for two rate cuts before the conflict began.
While inflation typically boosts gold’s appeal as a hedge, elevated interest rates weigh on the non-yielding metal’s demand.
Brent crude oil climbed above $115 a barrel after Yemeni Houthis launched attacks on Israel over the weekend, widening the ongoing war and adding to inflation woes. The contract was up 60 per cent in March, a record monthly rise.
US President Donald Trump said he wants to “take the oil in Iran” and could seize the export hub of Kharg Island, in an interview with the Financial Times published on Sunday.
“Gold’s price action last week suggested a reaction to oversold behaviour, and a possible reversal of recent declines. However, this needs to be confirmed by price action this week. Given the rapid flow of headline news, it’s easiest to expect volatility,” Frappell said.
Spot silver fell 1.3 per cent to $68.67 per ounce. Spot platinum gained 0.3 per cent to $1,868.11 and palladium rose 1 per cent to $1,391.
Published on March 30, 2026