Gold rises over 3%, but on track for worst month since 2008

Gold rose on Tuesday, but remained on track for its steepest monthly decline since October 2008, as persistent inflation worries and expectations of higher interest rates due to the impact of the Iran war weighed on the non-yielding metal.

Spot gold was up 3.2% to USD 4,652.31 per ounce by 1:31 p.m. EDT (1731 GMT), the highest level since March 20. US gold futures settled 2.7% higher at USD 4,678.60.

The US dollar slipped, but remained on course for a monthly gain. A stronger dollar makes greenback‑priced bullion more expensive for holders of other currencies.

“The current rally in gold is encouraging and is because of some increased optimism about de-escalation in the Middle East. But, I need to see more upside performance for it to be a continuation pattern,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

“In the long term, the underlying trend remains bullish, and key fundamental supports such as de‑dollarization and central bank buying are still in place.”

The Wall Street Journal reported, citing administration officials, that President Donald Trump was willing to end the military campaign against Iran even if the Strait of Hormuz remains largely closed. Meanwhile, US Defense Secretary Pete Hegseth said the next few days in the war against Iran would be decisive and warned Tehran that the conflict would intensify if it did not make a deal.

Spot gold is down 11.8% in March, as higher oil prices triggered by the war in the Middle East weigh on bullion. The energy price surge has intensified inflation concerns and prompted markets to reassess interest rate expectations. Despite being a hedge against uncertainty and inflation, high rates raise the opportunity cost of holding the metal.

BMI kept its 2026 gold forecast at an annual average of USD 4,600, while Goldman Sachs continues to forecast the gold price reaching USD 5,400 by the end of 2026.

Spot silver rose 6.7% to USD 74.64, but was down 20.4% for the month.

Analysts at BNP Paribas see silver trading in a range of USD 65 to USD 75 per ounce through 2026 and expect the physical market to shift into surplus by 2027.

Platinum gained 3.1% to USD 1,958.05, and palladium rose 5.2% to USD 1,479.25. Both metals were on track for monthly declines.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Paul Simao and Tasim Zahid)