TLDR
- Continuous gold futures plummeted more than 7% Thursday, settling at $4,558 per ounce, while silver tumbled over 9%.
- The Fed maintained its benchmark rate at 3.5%–3.75% and indicated a more hawkish outlook with reduced rate cut expectations.
- Iran retaliated against Israel’s South Pars gas field attack by targeting multiple energy facilities across the Middle East.
- Major mining companies saw premarket losses, with Freeport-McMoRan, Newmont, and Royal Gold all declining.
- Market expectations now point to no Federal Reserve rate reductions before September, strengthening the dollar and weighing on gold prices.
Thursday witnessed one of the most dramatic single-session declines for gold in recent times, as market participants grappled with the dual headwinds of persistent elevated interest rates and escalating hostilities between Iran and Israel.
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
By early morning trading, continuous gold futures had crashed more than 7% to reach $4,558 per ounce—a staggering $289 decline. Spot gold prices showed a 4.3% decrease to $4,609.02 per ounce as of 8:36 AM ET. The precious metals rout extended to silver, with futures plunging 9.3% and spot prices dropping 11% to $67.17 per ounce.
The dramatic selloff drove gold prices significantly beneath the $5,000-per-ounce threshold that had been maintained for approximately a month.
Federal Reserve Maintains Rates, Takes Hawkish Turn
On Wednesday, the Federal Reserve opted to maintain its current interest rate policy, preserving the target range between 3.5% and 3.75%. Chairman Jerome Powell highlighted emerging inflationary pressures and indicated the central bank would pursue “a meaningful amount of movement toward fewer cuts.”
Wednesday’s release of robust U.S. producer inflation figures compounded the pressure on precious metals. Financial markets subsequently adjusted their rate cut expectations, with CME FedWatch data indicating September as the earliest probable timeframe for any policy easing.
As a Gold generates no yield, its attractiveness typically diminishes during periods of sustained high interest rates. Market participants frequently reallocate capital toward yield-generating instruments in such environments.
“Fed rate cuts have been pushed out further in the future,” explained Adrian Ash, a researcher at BullionVault. “Mechanically, that would be bad for gold.”
While Ash characterized the current situation as a “test” for the yellow metal, he refrained from declaring the current level as a definitive price floor.
Iranian Retaliation Disrupts Energy Infrastructure
The precious metals decline occurred simultaneously with a significant surge in crude oil valuations. Brent crude futures soared 6.3% following Iran’s overnight assault on critical energy infrastructure throughout the Middle East.
Tensions intensified Wednesday after Israeli forces targeted South Pars, recognized as the planet’s most extensive natural gas field. Iran’s countermeasures included coordinated strikes against numerous energy installations across the region, while simultaneously maintaining offensive operations against Israeli territory.
The Strait of Hormuz, a vital conduit for international oil and gas transportation, has essentially become impassable, creating additional upward momentum for energy commodity prices.
Elevated crude oil prices are widely regarded as inflationary catalysts, further diminishing prospects for imminent Federal Reserve policy accommodation.
OCBC analysts wrote in a 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 added that safe-haven flows into gold are “being offset by the drag from rising real yields.”
Mining sector equities experienced parallel declines during premarket hours. Freeport-McMoRan shares retreated 4.4%, Newmont declined 7.6%, and Royal Gold slipped 4.6%.
The U.S. dollar gained strength amid expectations for prolonged elevated rates, creating additional resistance for gold, which is denominated in dollars globally.
According to CME FedWatch data, market participants are now pricing in zero probability of rate cuts until September at the earliest, representing a postponement from earlier projections.
