Gold prices (GC=F) bounced on Tuesday on hopes of a swift end to the Middle East conflict, but the precious metal is on track for its worst month in nearly 18 years.
Gold spot prices jumped 3% as President Trump signaled the war “won’t last much longer.” Meanwhile regional media reported that Iranian leadership has signaled they may be open to negotiations, sending bullion to above $4,650 per troy ounce.
Even with Tuesday’s rally, it’s set to close around 12% lower for the month of March, marking the biggest monthly drop for its spot price since October 2008, when it plunged more than 16%. March is also the second biggest drop for gold futures since June 2013.
But Wall Street sees this month’s drop — which called into question the metal’s safe haven status — as temporary after it touched a low of about $4,100 last week.
“Bottoms are always a process, and I do believe we are in the middle of one,” Otavio Costa, founder and CEO of Azuria Capital, wrote in a post on Tuesday.
Read more about gold’s moves and today’s market action.
Surging oil prices stemming from the Middle East conflict have boosted inflation expectations and fueled concerns that the Federal Reserve and other central banks may not cut rates this year.
On Monday, however, Fed Chair Jerome Powell said inflation expectations were “well anchored” and that the “tendency is to look through any kind of a supply shock.” Those comments sent bond yields down by as much as 10 basis points as traders priced in the possibility of a more dovish Fed.
Strategists also pointed to a cross-asset liquidity grab as higher oil prices and a strengthening dollar have forced foreign buyers to sell best performers and greenback-denominated assets to raise cash. Gold prices had jumped by more than 65% in 2025.
JPMorgan analysts noted March’s brutal flush doesn’t change their medium-term outlook for gold, especially if the economy slows.
The “longer the energy disruption goes on the more sizeable the inflationary and, importantly, growth impacts become,” the analysts wrote.
The backdrop for the metal, JPMorgan analysts added, “will likely quickly flip materially bullish, amplified by a sharp shift towards Fed easing as the employment side of the Fed’s dual mandate takes precedence.”
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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