Gold and Silver Prices Deteriorate Further, Lacking Momentum to Recover
Jakarta — Gold prices remain under pressure as market participants monitor the escalating Iran conflict and await decisions from the US Federal Reserve.
According to Refinitiv data, gold closed at US$5,004.38 per troy ounce on Wednesday, 17 March 2026, declining 0.02% during trading. This decline extends gold’s losing streak to 3.6% over the past five consecutive days.
Gold prices remained weak on Thursday, 18 March 2026, at 06:21 WIB, slipping 0.11% to US$4,998.97 per troy ounce.
Jim Wyckoff, senior analyst at Kitco Metals, stated that the gold market currently reflects a “tug of war” between demand for safe-haven assets and inflationary pressures. According to Wyckoff, geopolitical tensions are driving interest in gold, but inflationary pressures and expectations of higher interest rates are restraining price increases. “I think gold will likely set new records, but perhaps not in the near term. It appears that bullish investor momentum is beginning to wane,” he told Reuters.
Gold is typically considered a safe-haven asset during periods of uncertainty and inflation. However, the precious metal becomes less attractive when interest rates are elevated, as gold yields no returns comparable to bonds or deposits.
The US-Israel war against Iran, now entering its third week, has disrupted global energy trading and triggered concerns of inflation spikes. Israel claimed on Tuesday to have killed Iran’s security chief, whilst a senior Iranian official stated that the new supreme leader has rejected de-escalation offers transmitted through mediators, asserting that Israel and the United States must first “be forced to their knees.”
International oil prices rose more than 2% yesterday, further adding to inflationary pressures.
Market participants are also awaiting the Federal Reserve’s interest rate decision scheduled for announcement early Wednesday or Thursday morning Indonesia time. Markets expect the US central bank to maintain interest rates steady.
Germany’s Commerzbank noted in its analysis that the Fed meeting is unlikely to be a major catalyst for gold, as uncertainty regarding the war’s duration and oil supply disruptions make the US central bank inclined to exercise caution.
Why Gold Prices Are Not Soaring
Gold’s movement during the current war is considered rather surprising. Typically, gold prices surge sharply during economic crises or global conflicts when investors seek safe assets.
For example, when Russia launched its major invasion of Ukraine, gold prices jumped dramatically.
Remi Bourgeot, economist at the French Institute for International and Strategic Affairs, stated that Western sanctions against Russia at that time created a “panic wave” among central banks, which subsequently prompted numerous countries to stockpile gold to reduce reliance on the US dollar.
However, the US-Israel war against Iran has triggered a different response in the gold market.
James Meadway, former economic advisor to the UK shadow government, stated that traders may be calculating that the Fed will halt interest rate cuts, or could even raise rates in response to mounting inflation.
“This makes dollar-denominated assets more attractive, whilst gold—which yields no interest—becomes less attractive,” he explained.
Additionally, gold has already experienced substantial gains since the beginning of the year.
“Gold prices have risen so considerably previously that the reaction to the current war has become more muted,” Meadway said.
Rebecca Christie, senior researcher at think tank Bruegel, also assessed that gold prices this year are far above their historical levels.
She added that several other factors are restraining gold price increases. These include a stronger US dollar, which makes gold prices traded in dollars more difficult to rise. Oil price increases could trigger inflation, which ultimately makes the dollar more attractive compared to gold.
Bourgeot stated that gold is no longer considered as robust a hedge against uncertainty as it was two years ago. According to him, gold has become a highly speculative asset.
Analysts deem it difficult to predict gold’s direction due to the Middle East situation remaining highly uncertain. Christie stated that the primary factor currently restraining gold’s rise is that prices have already increased substantially beforehand.