Gold Set for Third Weekly Loss, Dollar Gains
Synopsis
Gold is headed for a third straight weekly drop, sliding to $4,665 an ounce, its lowest since early February, as a hawkish Federal Reserve, a stronger US dollar and higher Treasury yields pressure prices. Oil soared above $115 a barrel after Iran struck energy facilities in the Middle East, igniting new inflation fears and prompting the Fed to signal just one rate cut this year, in 2026. Gold is now down over 9% from when the US-Israel strikes on Iran started on February 28. Buying by the central bank continues to be a major long-term support for prices.
Gold is on track for a third consecutive losing week, tumbling to a six-week low of $4,665 as Fed and powerful dollar combined with rising oil prices from the unrolling Iran war to drag down prices.
Key Highlights
- Gold is set for a third consecutive weekly loss, down more than 9% since the war with Iran started.
- Oil soared more than $115 a barrel after Iran struck energy facilities in the Middle East.
- Gold dropped to $4,665 on Thursday, its lowest price since Feb. 6.
- A more expensive dollar is pricing out buyers of gold outside the US.
Gold Has Declined Over 9% Since War with Iran Broke Out
Gold ends the week on a soft note. It dropped to $4,665 an ounce on Thursday, its weakest point since early February. Gold in spot prices was down 2.7% to $4,687 per ounce and US gold futures were lower by 4.3%, at $4,688. That puts it on track for a third weekly decline in row, streak that began immediately after the US and Israel hit Iran on Feb. 28
Gold had been trading above $5,000 weeks prior, and hit an all-time high of $5,627 in January. And the decline since then has been steep and swift.
Why the Fed’s Tone Is Bad for Gold
The Federal Reserve met Wednesday and voted to hold interest rates steady at 3.50%–3.75%. That was expected. What ruined gold was what the Fed said next to that decision.
Ole Hansen, head of commodity strategy at Saxo Bank, said gold fell sharply for a second day after it had broken $5,000 and was dragged down by a stronger dollar and hawkish language from Federal Reserve Chair Jerome Powell. It trimmed its interest rate cut forecast to just one in 2026, likely in December, and cautioned that an increase in oil prices driven by the war with Iran could keep inflation high.
Oil above $115 is making things worse, not better
Usually war and chaos drive up gold as investors seek safety. This time around, the war is doing the opposite, keeping rates high and driving up the dollar, each of which weighs on gold.
Oil prices soared above $115 a barrel after Iran targeted energy facilities across the Middle East in retaliation for Israel’s strike on its South Pars gas field, a major escalation in the conflict. Higher oil means higher costs for businesses, which then drives inflation. Both the dollar and 10-year US Treasury yields climbed, making gold more expensive for buyers using other currencies and diminishing the allure of holding an asset that earns no interest.
Where Gold Goes From Here
But not everyone is throwing in the towel on gold, despite its recent plunge. Banks such as JPMorgan and Goldman Sachs have year-end price targets that remain far above current levels. Since the US-Israel strike on Iran, spot gold is down more than 9% and been pressured by a stronger dollar, one of the clearest safe-haven winners in this crisis.
Gold continues to be bought in large volumes by central banks around the world, led by China. JPMorgan forecast that central banks would purchase approximately 755 tonnes of gold in 2026. If the Iran war eventually cools and the Fed becomes less aggressive, gold may regain its footing rapidly. For the time being, however, the dollar is winning the safe-haven standoff and gold is on its back foot.
FAQs
- Why is gold going down when there’s a war in the Mideast?
The war is contributing to rising oil prices, raising fears of inflation and, in turn, keeping interest rates high. That strengthens the dollar and makes gold less appealing.
- How much gold has fallen since Iran war started?
Over 9% since the US-Israeli assaults on February 28, falling from above $5,000 to roughly $4,665.
- Will gold recover?
Big banks still have optimistic year-end targets. Buying by central banks and long-term inflationary risks provide support for gold. But in the short run, the strong dollar and high rates are still headwinds.
Follow Inspirepreneur Magazine for the business news.
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
