Table of Contents

• Real-time analysis of current gold price trends


• The impact of escalating US-Iran conflict on the gold market


• Expectations for a Fed rate cut have been significantly adjusted.


• Latest views from mainstream institutions and experts


• Long-term trends and short-term strategy adjustments

Real-time analysis of current gold price trends

The gold market saw a modest rebound on Wednesday (March 4) after Tuesday's sharp sell-off, but remains within a high-level consolidation range, with investor sentiment shifting from weekend panic to a more rational wait-and-see approach. Many traders who bought at the open on Monday are now trapped near this week's peak, and spot gold is currently fluctuating around a key range, unlikely to escape the dual pressures of the US dollar and yields in the short term.

Spot gold was trading around $5147.46 during the session, rebounding about 1.17% on the day, but still has significant room for a pullback from this week's high of $5419.66 . Gold prices plunged more than 4% on Tuesday, marking the largest single-day drop in recent times, mainly due to the rapid fading of safe-haven buying triggered by the weekend's US-Iran conflict. In the futures market, COMEX gold contracts were actively traded, with prices fluctuating between $5155 and $5175 , and volatility remaining high.

From a technical perspective, gold has held above the key psychological level of $5,100 and the 50% Fibonacci retracement level in the short term. However, if it fails to break through the 78.6% retracement resistance near $5,342 , downward pressure will intensify. The RSI indicator has slightly rebounded from oversold territory, but overall, the market still indicates a high-level consolidation pattern. A recent Reuters report points out that gold has failed to fully realize its traditional safe-haven role, with investors instead flocking to dollar-denominated cash assets, resulting in gold prices underperforming expectations.

Current prices have attracted some bargain hunters, but overall volatility persists. Traders are advised to closely monitor the synchronized movements of the US dollar index and US Treasury yields to determine the next direction. Latest data shows that spot gold briefly touched above $5200 during the European session, but the rebound was limited due to a brief respite in the dollar, and the market remains wary of the potential chain reaction from energy price fluctuations.

The impact of escalating US-Iran conflict on the gold market

The US-Iran conflict has entered its fourth day. Iran announced measures to control the Strait of Hormuz, causing crude oil prices to surge by more than 8% on Tuesday, directly pushing up global energy costs and inflation expectations. Initially, gold prices rose above $5,400 due to safe-haven demand, but market focus quickly shifted to the potential drag on the global economy from rising energy prices, leading to rapid profit-taking by safe-haven buyers.

Multiple media reports indicate that the conflict has spread to a wider area, with the Trump administration taking a hard line and markets concerned about supply chain disruptions and long-term geopolitical risks. Investors initially viewed gold as a safe haven, but with oil prices remaining high, inflation concerns have overshadowed the simple safe-haven logic, significantly diminishing gold's short-term appeal. A recent Reuters article explicitly points out that gold "messed up" in this Middle East turmoil, failing to attract the large inflows of funds it had during previous crises, and instead being overshadowed by the strong performance of the US dollar.

If the conflict prolongs, oil prices will struggle to quickly return to pre-war levels, putting greater downward pressure on gold as a non-interest-bearing asset. Gold may continue to test lower levels in the short term, but long-term geopolitical uncertainty will continue to support prices. Investors may consider gradually building positions within the current range. Reuters emphasizes that investors are more inclined towards cash and dollar assets during this crisis, and gold's traditional safe-haven appeal is temporarily suppressed by inflation and liquidity demands.

Expectations for a Fed rate cut have been significantly adjusted.

The latest data from the CME FedWatch tool shows that the probability of the FOMC keeping interest rates unchanged at the March meeting has risen to over 97% , while the probability of a 25 basis point rate cut in June has plummeted from about 50% a week ago to 33.5% , while the probability of keeping rates unchanged has risen to 62.8% . This shift in expectations is mainly due to the surge in oil prices triggered by the Middle East conflict, with the market worried that inflation will spiral out of control again, making it difficult for the Fed to launch easing policies in the short term.

The core pillars of this round of gold price increases have included continued central bank gold purchases, expectations of multiple interest rate cuts by the Federal Reserve this year, and speculative capital inflows. However, all three pillars are currently showing signs of weakening to varying degrees. February's central bank gold purchase data is about to be released and is expected to continue to provide positive support, but in the short term, investors need to adjust their positions based on policy expectations. Reuters reports emphasize that if oil prices remain high for an extended period, the policy path under the new Federal Reserve Chairman Kevin Warsh may be more cautious, even triggering discussions about interest rate hikes, which would significantly suppress gold prices.

Market expectations for the number of rate cuts throughout the year have been significantly lowered from the previous two to three, as investors reassess gold's performance in a high-interest-rate environment. Kitco experts point out that the current decline in rate cut expectations is the main catalyst for the gold price pullback, but once the conflict eases or inflation data shows signs of decline, gold is expected to quickly recover its losses. The latest FedWatch update shows that the market's probability of stability in March is close to certainty, further reinforcing short-term hawkish expectations.

Latest views from mainstream institutions and experts

Deutsche Bank strategist Tim Baker recently stated that they have not observed significant safe-haven demand for government bonds; the market is more concerned that inflationary pressures triggered by rising oil prices will constrain the Federal Reserve's interest rate cut plans. The rise in yields following a 10% surge in oil prices over two days is a normal market reaction, a view highly consistent with the latest Reuters report.

The Reuters article further points out that investors' choice of dollar cash over gold or US Treasury bonds during the conflict indicates a significant increase in market preference for liquid assets. Kitco's latest analysis suggests that despite short-term weakness, gold still benefits from global central banks' demand for diversified reserves and the long-term inflation hedging logic, recommending investors buy on dips.

JPMorgan Chase maintains its year-end gold price target of $6,300 , emphasizing that institutional demand and policy uncertainty will provide long-term support. BNP Paribas recently raised its 2026 target to $5,620 , believing gold remains attractive in the current environment. Multiple institutions agree that the trend of central bank gold purchases will not change, which will be the strongest backing for a long-term bull market in gold prices. Zaner Metals strategist Peter Grant stated that as long as the war with Iran continues, the macroeconomic fundamentals for gold remain broadly favorable.

Long-term trends and short-term strategy adjustments

From a medium- to long-term perspective, gold continues to be strongly supported by central bank gold purchases, global geopolitical uncertainty, and demand for inflation hedging. The upcoming release of February's central bank gold purchase data is expected to further confirm this trend. Several investment banks, such as Wells Fargo, have raised their year-end 2026 price targets to the $6,100-$6,300 range, while UBS predicts a potential medium-term high of $6,200 .

In the short term, the market needs to accept the reality of position adjustments, focusing on key indicators such as the US dollar index , the 10-year US Treasury yield , and the upcoming ADP employment data. If there are signs of easing tensions in the Middle East or the Federal Reserve adopts a dovish stance, gold is expected to resume its upward trend; conversely, if oil prices continue to climb, downward pressure will be further released.

Overall, investors should develop strategies based on their own risk tolerance and avoid emotional trading. A recent Reuters report reminds the market that while short-term volatility in gold has increased, the long-term bull market fundamentals remain unshaken, and suggests paying close attention to inflation data and central bank actions as important references. In the current environment, gold volatility is expected to continue, and traders can use technical support levels to build positions in stages, while strictly setting stop-loss orders to cope with unexpected geopolitical events.

Editor's Summary

The gold market is currently in a complex phase, squeezed by escalating geopolitical conflicts and expectations surrounding monetary policy. The situation in the Middle East has pushed up oil prices and inflation risks, directly leading to a sharp decline in the probability of a Fed rate cut in June, causing gold prices to quickly retreat from their highs and experience significant volatility. Nevertheless, central bank gold purchasing trends, geopolitical uncertainty, and long-term inflation hedging demand still provide solid support at the bottom. Short-term volatility is expected to remain high, and investors need to closely monitor oil price movements, statements from Fed officials, and key economic data, flexibly adjusting their positions to cope with the increasingly uncertain environment.

Frequently Asked Questions

Q: Why did gold prices fall rapidly from their highs this week?

A: Initially, safe-haven buying pushed gold prices above $5,400, but subsequent surges in oil prices triggered inflation concerns, causing the dollar and US Treasury yields to strengthen in tandem. Investors opted for dollar cash rather than gold, leading to profit-taking and a rapid decline. Reuters pointed out that gold failed to attract traditional safe-haven funds, instead being dominated by liquidity demand.

Q: What are the main reasons for the significant decrease in the probability of a Fed rate cut in June?

A: The Middle East conflict has led to a surge in oil prices, raising market concerns about a renewed runaway inflation, making it difficult for the Federal Reserve to ease policy in the short term. The CME FedWatch tool reflects this shift in real time, decreasing from about 50% to 33.5%, while the probability of it remaining unchanged has risen to 62.8%, highlighting the constraints that energy shocks place on monetary policy.

Q: How should we assess the long-term impact of the US-Iran conflict on gold?

A: In the short term, a prolonged conflict would suppress expectations of interest rate cuts and exacerbate the pullback, but long-term uncertainty would strengthen gold's status as the ultimate safe-haven asset, supporting a new round of price increases. Reuters analysis shows that as long as the war continues, macroeconomic factors remain favorable for gold.

Q: Can central bank gold purchases continue to be the core driver of gold price increases?

A: Yes, the diversified reserve needs of central banks are one of the main drivers of the gold bull market, and the upcoming February data will continue to provide strong support for gold prices. Even with increased short-term volatility, there are no signs of this trend reversing.

Q: What operational strategies should investors adopt in the current environment?

A: In the short term, accept the reality of a pullback and pay attention to the correlation between the US dollar and yields. In the long term, take advantage of low points to gradually build positions, using geopolitical and policy uncertainties as hedging tools, while strictly controlling risk. Experts suggest combining technical support levels for phased entry and avoiding emotional chasing of highs and lows.