A first in 18 years for gold

Uncertainties and fluctuations in global markets turned March into a very challenging period for gold investors. Although positive signs regarding a resolution between the US and Iran were observed, the precious metal experienced a significant decline in March.

United States Dollar and Treasury bond yields fell as news spread that the war between the two countries could be brought to an end. This helped the ounce price of gold climb approximately 3.9 percent to 4,668.06 dollars. Nevertheless, the 12 percent decline in the value of gold on an ounce basis throughout March marked the largest monthly drop seen since 2008, when the financial crisis occurred.

On the other hand, on the US side, President Donald Trump's statements that he is ready to end the conflict despite the Strait of Hormuz being largely closed drew attention. Furthermore, it was stated that in response to Iran's missile attacks, Trump called for cooperation with other countries on strategic energy transit. The Iranian press reported that President Pezeshkian reiterated that his country is ready to end the war, but that the Tehran administration maintains its demands.

Throughout March, the tension in the Middle East and the accompanying global economic concerns prevented gold from painting a stable picture. Both rising inflation concerns and expectations of a slowdown in economic growth hindered investors' search for a safe haven.

THE POSSIBILITY OF RISING INTEREST RATES AFFECTED THE MARKETS

Investors acted on expectations that leading central banks, primarily the US Federal Reserve (Fed), might implement interest rate hikes to bring inflation under control. However, Fed Chair Jerome Powell's statement that inflation expectations remained stable caused interest rate hike forecasts to pull back slightly on Monday. Rising interest rates stand out as a factor that reduces the appeal of assets like gold, which do not offer yields.

In macroeconomic data, it was noted that consumer confidence in the US increased unexpectedly in March. Despite this, a decrease in job postings and a slowdown in hiring gave signals of cooling in the labor market in the pre-war period.

CURRENT STATUS OF PRECIOUS METALS

In New York, an ounce of gold recorded a 3.5 percent increase in the last session, settling at the 4,668.06 dollar level. Silver investors also gained during this period, reaching 75.17 dollars with a 7.3 percent increase. There was also appreciation in the platinum and palladium markets. In addition to these developments, the Bloomberg Dollar Spot Index fell by 0.6 percent.

Experts state that geopolitical developments and the monetary policy steps of central banks may continue to closely affect commodity markets, especially gold, in the coming period.

News Source: 12punto