Global Gold Price Plummets 11 Percent in a Week, Losing Its Appeal?

JAKARTA - The global gold price is facing sharp pressure amid the intensifying conflict in Iran, which is disrupting global oil flows and triggering a surge in energy prices. Rather than acting as a safe-haven asset, gold is being pressured by changing interest rate expectations and the strengthening of the US dollar. Quoting CNN on Sunday (22/3/2026), over the past week, the gold price plummeted by up to 11 percent, becoming the largest weekly decline since 1983. Cumulatively since the conflict began, the price of the precious metal has fallen by more than 14 percent. This turbulence has also driven the strengthening of the US dollar and prompted investors to review their portfolios. Market participants now expect the US Federal Reserve to hold interest rates steady throughout the year. This situation enhances the appeal of yield-generating instruments such as bonds, while suppressing interest in gold, which produces no income. Previously, the gold price had surged in the autumn when the Federal Reserve cut interest rates three times in a row. Now, expectations of persistently high interest rates in the coming months are pushing up bond yields, thereby increasing the opportunity cost of holding gold. “In the recent weakening of gold prices, the rise in yields has played a major role,” said Hardika Singh, a strategic economist at Fundstrat. Concerns over inflation have led some central banks to hold interest rates steady, with others even raising them, such as the Reserve Bank of Australia. In addition to interest rates, movements in the US dollar are also a key factor pressuring gold prices. Over the course of this month, the US dollar has strengthened by nearly 2 percent since the Iran conflict began, ending a downward trend from the previous few months. This strengthening makes gold, which is priced in US dollars, more expensive for global investors, thereby reducing its appeal. Typically, gold benefits when the US dollar weakens as it becomes more affordable for international investors. However, the current conditions are the opposite.