Global Gold Price Plummets to US$4,200, JPMorgan Reveals the Cause
The global gold price fell sharply in trading on Monday morning, 23 March 2026. This correction marks the worst weekly performance since 1983 and has wiped out gains for the entire year of 2026, even as the conflict in the Middle East remains unresolved.
Spot gold traded at US$4,288, or approximately Rp72.67 million per ounce (based on an exchange rate estimate of Rp16,950 per US dollar), down more than 10 per cent over the week. Meanwhile, gold futures declined by 7 per cent.
“This is a very brutal price drop,” said Greg Shearer, Head of Precious Metals Strategy at JPMorgan, quoted from Yahoo Finance on Monday, 23 March 2026.
Shearer explained that gold has reversed from a solid strengthening trend at the start of the year to become an asset abandoned by investors amid the turmoil of the Middle East conflict. The decline was triggered by selling of gold and other precious metals as global oil prices surged due to the Middle East conflict.
“Gold is caught in contagion risk from the massive sell-off,” he continued.
This situation has driven up inflation expectations and raised concerns that global central banks, including the Federal Reserve (The Fed), will not cut interest rates in the near term. Even in Europe, several officials have begun to open the possibility of raising benchmark interest rates.
On the other hand, the strengthening of the US dollar and rising bond yields are further pressuring gold prices. As a non-yielding asset, gold becomes less attractive compared to other instruments that offer higher returns.
Since the outbreak of the conflict, gold prices have already fallen more than 14 per cent. This is because market participants have used precious metal assets as a source of liquidity.
“In the short term, the strengthening US dollar and high liquidity of gold make it a source of funds during market pressure,” said Ewa Manthey, Commodities Strategist at ING.
Previously, gold had recorded a significant surge with an increase of up to 65 per cent throughout 2025. Now, market participants are beginning to worry about changes in structural support from central banks, especially amid global liquidity constraints.
Shearer stated that concerns among investors are growing that a combination of economic, energy, and exchange rate pressures could alter the direction of central banks’ gold purchasing policies. Nevertheless, JPMorgan analysts still see positive long-term prospects for gold.