Gold rose on Tuesday but was set for its biggest monthly slump in nearly two decades, as fading rate cut expectations, surging energy costs and a firmer dollar amid the Iran war weighed on demand.
Spot gold rose 1.8% to $4,593.12 per ounce by 1208 GMT, hitting its highest since March 20. U.S. gold futures for April delivery gained 1.2% to $4,610.
Bullion has declined more than 13% this month, putting it on track for its steepest fall since October 2008. However, it is up more than 6% for the quarter, having scaled a record high of $5,594.82 on January 29.
"You could probably describe the recovery that we're seeing in gold as something of a dead cat bounce, which is to say not much of a bounce at all," said independent analyst Ross Norman.
"If indeed (U.S. President) Donald Trump is able to exit himself from what could become a very protracted event, then we could see oil and the dollar coming off, which would be gold positive. But we're not in that position yet."
Iran attacked and set ablaze a fully loaded crude oil tanker off Dubai early Tuesday, after Trump warned the U.S. would obliterate Iran's energy plants and oil wells if it does not open the Strait of Hormuz.
The dollar headed for its biggest monthly gain since July, making greenback-priced bullion more expensive. The month-long Middle-East war has already driven up oil prices, raising the risk of global recession.
Gold, a go-to hedge against inflation and geopolitical risks, has fallen more than 14% since the U.S.-Israeli war on Iran began on February 28, as rising expectations of hawkish monetary policy outlook weighed on the non-yielding metal.
Money market participants have almost completely priced out any chance of a U.S. rate cut this year from about two cuts expected before the war, as per CME Group's FedWatch Tool.
Goldman Sachs, however, said it continues to expect gold prices will reach $5,400 per troy ounce by end-2026 as it expects two U.S. interest-rate cuts this year. Meanwhile, spot silver rose 4.9% to $73.39 per ounce, spot platinum gained 1.1% to $1,920.68, and palladium was up 4.6% at $1,471.07. All three metals were down about 20% each so far in March.
Published on March 31, 2026