World Gold Prices Fall, Pressured by Surge in Oil and US Dollar

Global gold prices fell sharply in early trading on Monday, 9 March 2026, pressured by US dollar strength and concerns that interest rates could remain elevated for longer.

The gold price decline occurred amid a surge in oil prices exceeding $100 per barrel as tensions in the Middle East intensified. According to Bloomberg, gold prices plummeted by 2.5 per cent and fell below $5,050 per troy ounce in early trading. This weakness followed gold’s first weekly decline in over a month.

Simultaneously, the US dollar index strengthened by 0.6 per cent.

The rise in crude oil prices triggered inflation concerns in the United States. This situation increased the likelihood that the US central bank, the Federal Reserve, will keep interest rates elevated for longer or even raise them further.

Higher interest rates typically have a negative impact on precious metals because they increase the opportunity cost of holding non-yielding assets such as gold.

Additionally, US dollar strength also tends to suppress commodity prices traded in that currency.

Although gold price movements have recently been volatile and its upward momentum has stalled, the precious metal still recorded a gain of approximately 17 per cent during the year to date. This increase has been driven by geopolitical uncertainty and global trade tensions, including policies of US President Donald Trump that have disrupted global trade dynamics and sparked concerns about Federal Reserve independence.

Demand from central banks has also supported gold prices. The People’s Bank of China was recorded as adding to its gold reserves in February, extending its purchasing streak to 16 consecutive months.

Should the conflict ease within a relatively short timeframe, the US dollar could weaken and gold prices could recover. Conversely, a prolonged conflict could strengthen the US dollar and increase US government bond yields as inflation expectations rise.