Market Alert: Gold Prices Slump 4% in a Day, Could They Still Rise?
Jakarta, CNBC Indonesia — Gold prices moved lower, pressured by a stronger US dollar and waning prospects for a rate cut. The outlook faded as inflation concerns grew amid fears of a potentially prolonged Middle East conflict.
Refinitiv data show gold closed at US$5,086.47 per troy ounce, down 4.5% on Tuesday, 3 March 2026.
The decline ended a five-session rally with a 3.5% gain.
The retreat also pushed gold to its lowest since 19 February 2026, marking eight consecutive sessions in the red.
By 06:30 WIB on Wednesday, 4 March 2026, gold had recovered slightly, edging up 0.7% to US$5,121.67 per troy ounce.
“The drop in gold appears to be driven by a flight to liquidity – into cash. The US dollar strengthened and bond yields moved higher,” said Bob Haberkorn, senior market strategist at RJO Futures, to Reuters.
The dollar surged as investors sought shelter amid a surge in energy prices tied to the Middle East conflict, which raised inflation concerns, pushed yields higher, and prompted markets to reassess the Federal Reserve’s policy path.
The dollar index jumped to 99.07 on Tuesday, 3 March 2026. That level was the highest since 24 January 2025.
The move into gold as a safe haven translated into higher costs for investors to buy gold, dampening demand.
“However, the price decline is likely temporary, and fund flows into safe-haven assets amid geopolitical risk should support higher gold and silver prices,” Haberkorn added.
On the geopolitical front, Iran-related tensions entered a fourth day, with blasts shaking Tehran and Beirut. A senior official of Iran’s Revolutionary Guards said on Monday that the Strait of Hormuz had been closed. In response, benchmark oil prices rose by more than 5% on Tuesday.
Damage to energy infrastructure and disruptions to tanker traffic through Hormuz heightened the risk of sustained higher prices for oil, gas, and refined products.
Fawad Razaqzada, market analyst at City Index and FOREX.com, said the damage sparked inflation concerns and lowered expectations for rate cuts. This left gold with less support.
Expectations for the Fed’s next rate cut have shifted from July to September, although markets still price in two 25 basis point cuts.
Although viewed as a hedge against inflation and volatility, gold tends to be more sought after in environments of low interest rates because it does not offer interest income.
Year to date, gold spot prices have risen about 19%, supported by global turmoil, after a 64% jump in 2025. Meanwhile, silver has gained over 16% this year.