Global Gold Price Drops 7% in a Week, Here's Why

The global gold price has plunged sharply throughout this week and is poised to record its worst weekly performance in the past six years. The surge in energy prices due to conflicts in the Middle East has altered market expectations regarding interest rate policies, while also pressuring the appeal of the precious metal. Quoted from Bloomberg on Friday (20/3/2026), the gold price stood at around 4,685 US dollars per ounce, down almost 7% over this week, marking the deepest decline since March 2020. The rise in crude oil, natural gas, and fuel prices triggered by the conflicts has sparked inflation concerns, thereby diminishing the likelihood of central banks cutting interest rates. This situation tends to disadvantage gold as it offers no interest yield. The gold price decline occurred alongside an increase in US government bond yields (Treasuries) and a strengthening of the US dollar. Investors are also selling gold to cover losses in other assets, while outflows from gold-based exchange-traded funds (ETFs) continue, erasing all accumulations since the start of the year. Robert Gottlieb, a former precious metals trader at JPMorgan Chase & Co. who is now an independent market commentator, has warned of the high volatility at present. “Don’t rush to buy when prices fall. Volatility is still too high,” he said. On the monetary policy front, the US central bank maintained interest rates at its mid-week meeting, in line with market expectations. Fed Chair Jerome Powell emphasised that new policy easing would only be implemented if there is tangible progress in reducing inflation. The current gold price movements recall the pattern in 2022, when Russia’s invasion of Ukraine triggered a global energy price surge. At that time, gold prices recorded declines for seven consecutive months until October, the longest losing streak on record. Nevertheless, on an annual basis, gold prices are still up around 8%. Previously, the global gold price had touched a record near 5,600 US dollars per ounce at the end of January.