Despite heightening uncertainties amid West Asia war the safe-haven demand for the precious metals is missing. Gold lost more than 13%, while silver lost much more 26% in March, making it the worst monthly correction since September 2011.
Despite a marginal 1% rise in prices on Tuesday on hopes of a de-escalation in the Iran war, gold is set for the worst month in more than 17 years as higher energy prices dimmed hopes for a US interest rate cut this year.
Spot gold was up 0.9% on Tuesday at $4,567.30 an ounce, at 1600 hrs on CME, while on the MCX, the metal for April 2, delivery was down 0.41% or `590 at `145,051 for 10 grams. Spot silver, on the other hand, was up 3.6% at $73.12 an ounce on the CME and was flat at `229,033/kg on the MCX.
Gold had scaled to a record of $5,600 for an ounce or 28.35 grams on January 28, 2026. On the other hand, silver which more than doubled in 2025 rose another 85% in January to touch a peak of $123/ounce on January 28, 2026. But both metals plunged the next day on profit taking, with silver plunging 31% and gold falling 13%.
For March, the white metal dropped 26% from their early-month peak due to a stronger dollar.
Traders said gold and silver bounced in early trade after US president Donald Trump told aides he is willing to end the US military campaign against Iran even if the Strait of Hormuz remains closed, the Wall Street Journal reported on Monday. That triggered a risk-on response from financial markets according to traders.
Bullion has fallen over 13% so far this month, putting it on track for its steepest decline since October 2008, weighed down by a stronger dollar and fading expectations of a US interest rate cut this year. Prices are still up about 5% for the quarter.
The market has almost completely priced out any chance of a Federal Reserve rate cut this year, as higher energy prices threaten to feed into broader inflation. Oil price has crossed $4 a gallon in the US Monday-- a first since March 2022 when Russia invaded Ukraine.
Before the Iran war erupted, there were expectations of two Fed rate cuts for this year. But outgoing Fed chair Jerome Powell said on Monday the central bank can wait to see how the war affects the economy and inflation, noting that policymakers typically look through shocks such as those from higher oil prices.