Gold fell, pressured by a stronger US dollar and concerns over higher interest rates, as the war in the Middle East extended into a second week and oil surged toward $120 a barrel.
Bullion tumbled as much as 3% to $5,015 an ounce, following its first weekly decline in more than a month, before paring some losses. Major oil and gas producers in the Persian Gulf region curbed output as the US-Israeli war with Iran showed no sign of resolution, while the dollar strengthened against all of its major peers. A gauge of the US currency jumped as much as 0.7%.
Gold has come under pressure as spiking crude prices stoke inflation fears in the US, raising the likelihood that the Federal Reserve will leave interest rates unchanged for longer, or even raise them. Higher borrowing costs, as well a stronger dollar, are typically negative for precious metals. Bullion has also served as a source of liquidity during a deepening rout in global equities.
While trading has been choppy and upward momentum has stalled, gold has still gained around 18% so far this year. US President Donald Trump’s upheaval of global trade and geopolitics, as well as threats to the Fed’s independence, has supported safer assets. Elevated central-bank buying has also underpinned growth, and the People’s Bank of China bought more gold in February, extending its purchasing streak to 16 months.
A relatively swift end to the conflict would likely see the dollar weaken and gold rally, while a prolonged war would see the US currency and Treasury yields rise in anticipation of higher inflation — in turn, diminishing the likelihood of a rate cut, Ed Meir, metals analyst at Marex Capital Markets Inc., said in a note released March 7. “There is a time to buy, a time to sell and a time to simply wait,” he said. “The latter is the preferred course of action for the moment.”
The war in the Middle East has now entered its 10th day. Over the weekend, Tehran picked a new supreme leader and kept up attacks in the Persian Gulf region, while Israel struck fuel depots in the Iranian capital and threatened the Islamic Republic’s power grid. Attacks on energy infrastructure and a halt to shipping through the Strait of Hormuz, which normally handles a fifth of the world’s oil, have driven up prices of crude and natural gas.
Spot gold fell 1.5% to $5,093.39 an ounce as of 10:44 a.m. in Singapore. Silver dropped 2.2% to $82.66. Platinum declined 3% and palladium lost 0.6%. The Bloomberg Dollar Spot Index rose 0.5% after adding 1.3% last week.
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Published on March 9, 2026
