Commodities

Gold Falls Nearly 1% to Around $4,450 as Middle East Conflict Drags on and Central Banks Slow Buying

Gold prices slipped nearly 1% to about $4,450 per ounce on Monday, paring recent gains as the Middle East conflict entered its fifth week with no clear resolution in sight. Ongoing fighting in the region has kept investors cautious, even though gold is traditionally seen as a safe‑haven asset during times of war and uncertainty.

Tensions have risen further as Iran‑backed Houthi militants in Yemen joined the conflict, targeting Israel over the weekend and threatening key shipping routes in the Red Sea and Saudi Arabian energy infrastructure. Reports also suggest that the US military is preparing for extended ground operations in Iran, raising concerns about a prolonged and costly war.

At the same time, gold remains more than 15% below its March peak as the oil‑price shock has stoked inflation worries and reinforced expectations for more interest‑rate hikes from major central banks. A reversal in central‑bank gold buying, which had earlier supported the rally, has added to the selling pressure, even as major economies are boosting liquidity to limit the economic damage from the Iran war.

Published on March 30, 2026 | 7 views

Key Takeaways

Key takeaway: Gold dropped about 1% to around $4,450 per ounce as Middle East tensions and expectatio...
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Frequently Asked Questions

Why did gold fall nearly 1% on Monday?

Gold dropped about 1% to around $4,450 per ounce as Middle East tensions and expectations of higher interest rates made investors cautious, even though wars normally boost demand for safe‑haven assets like gold.

How is the Middle East conflict affecting gold prices?

The conflict has entered its fifth week with no clear end, and attacks by Iran‑backed Houthi militants have raised risks to oil supply and trade routes. This has pushed oil prices up and increased inflation and rate‑hike expectations, which weigh on gold.

Why is gold still well below its March peak?

Gold is more than 15% below its March 2026 high because the oil‑price shock has revived inflation fears and central‑bank rate‑hike expectations, while central banks have also slowed their gold purchases that earlier supported the rally.

What role are central banks playing in the gold price move?

Central banks had been big buyers of gold, supporting prices earlier in the year, but they have now reduced their buying. At the same time, they are injecting more liquidity into economies to cushion the impact of the Iran war, which complicates the outlook for bullio

Could gold prices rise again if the war worsens?

If the conflict escalates further or triggers a sharper rise in oil prices and financial‑market stress, investors may return to gold as a hedge, which could push prices higher despite the pressure from higher interest‑rate expectations.