Global Gold Prices Strengthen Nearly 2% Amid Middle East Conflict Uncertainty

NEW YORK - Global gold prices strengthened nearly 2% at the close of trading on Wednesday (25/3/2026) local time, or Thursday morning (26/3/2026) WIB, driven by a decline in oil prices that alleviated inflation concerns despite persistent uncertainty from the Middle East conflict. Citing Reuters, spot gold prices in the market rose 1.8% to $4,552.94 per ounce, after hitting a four-month low earlier in the week. Meanwhile, US April gold futures contracts closed up 3.4% at $4,552.30 per ounce. “Gold is experiencing a technical recovery and is also supported by optimism that the conflict involving Iran may start to subside, which is helping to pressure oil prices,” said Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals. “We still need to see further easing of inflation concerns before considering the possibility of US interest rate cuts this year. Gold could rise back to $5,000 per ounce if that happens,” he added. A senior Iranian official stated that his country is still reviewing the proposal, although the initial response given was negative. On the other hand, the Pentagon is reportedly planning to send thousands of airborne troops to the Gulf region to provide more options for US President Donald Trump in considering a ground attack. The decline in oil prices has helped ease inflationary pressures, thereby reducing the likelihood of high interest rates persisting longer. Although gold is known as a hedge against inflation, its appeal tends to diminish in a high-interest-rate environment because it offers no yield. Analysts at SP Angel noted that the recent volatility in gold prices reflects a significant surge in speculative investment flows throughout 2025. Nevertheless, central banks in various countries are expected to continue buying gold for their reserves. This trend is even predicted to continue into 2026 with new countries joining in purchases. “The recent price drop has led to a substantial outflow of capital. However, the trend of central bank reserve diversification is expected to continue, with new players starting to buy in 2026,” wrote SP Angel analysts in their note. Throughout last year, spot gold prices recorded a 64% surge and reached an all-time high of $5,594.82 per ounce on 29 January.