NEW YORK: 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 2.2percent to USD4,608.16 per ounce by 11:01 a.m. EDT (1501 GMT), after hitting its highest price since March 20 earlier in the session. US gold futures gained 1.8percent to USD4,639.00.
The US dollar eased, 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, but I need to see more upside performance for it to be a continuation pattern. If anything happens that increases the likelihood of a Federal Reserve rate hike, then we could see downside in prices,” 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.”
Spot gold is down 12.7percent 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 USD4,600, while Goldman Sachs continues to forecast the gold price reaching USD5,400 by the end of 2026.
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 silver rose 4.9percent to USD73.37, but was down 22percent for the month. Analysts at BNP Paribas see silver trading in a range of USD65 to USD75 per ounce through 2026 and expect the physical market to shift into surplus by 2027.
Platinum gained 1.2percent to USD1,922.07 an ounce, and palladium rose 2.6percent to USD1,442.50. Both metals were on track for monthly declines.
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