Gold Retreats as Dollar Surges on Day 10 of Iran War

Gold pulled back 1.7% on March 9 as dollar strength and rising rate concerns outweighed safe-haven demand,  reversing the previous week's rally to near four-week highs as the US-Israel conflict with Iran entered its tenth day and oil prices neared US$120 a barrel.

Spot gold was down 1.7% at US$5,080.9/oz, while US gold futures for April delivery fell 1.3% to US$5,089.80. Among other metals, spot silver was down 0.3% at US$84.06 per ounce, platinum gained 0.6% to US$2,148.25 and palladium rose 1.4% to US$1,648.

Oil prices neared US$120 a barrel as Israel's military launched attacks in central Iran and struck the Lebanese capital Beirut. The war has effectively shut the Strait of Hormuz, through which a fifth of global oil and seaborne liquefied gas is shipped near Iran's coast. The US dollar firmed on soaring oil prices, sending investors toward cash on fears that a protracted conflict could disrupt energy supplies and hurt global growth. 

Jim Wyckoff, Senior Analyst, Kitco Metals, explained that war-driven inflation concerns and rate expectations are weighing on gold, though a prolonged conflict is seen sustaining safe-haven demand and limiting further downside. 

Markets React to US-Israel-Iran Conflict

Markets have swung sharply since the Feb. 27 strikes. Spot gold surged as much as 2.3% to US$5,395.99/oz on March 2, nearing a four-week high, while US gold futures rose over 3% to US$5,411.40/oz extending gold's 2025 surge of 64% that peaked at a record US$5,594.82/oz on Jan. 29. Mining equities, however, moved in the opposite direction even as bullion rallied: precious metals producers lost up to 13% in market value as investors priced in operational risk and geopolitical uncertainty across the sector.

Precious metals producers posted the steepest losses. Newmont dropped 7.9% to a US$129 billion market cap, Barrick Mining fell 8.3% to US$78 billion, and AngloGold Ashanti declined 10.4% to US$58 billion. Royalty firms Wheaton Precious Metals and Franco-Nevada fell 8.7% and 5.6%, to US$68.7 billion and US$50 billion respectively. Diversified and copper-focused miners held up better: BHP fell 5.6% but maintained a US$200 billion-plus valuation, Southern Copper dropped 5.8% to US$170 billion, and Freeport-McMoRan fell 4.0% to US$94 billion. "We run scenarios across many situations. You look and see what the impact could be, and it is not in our hands to do much about that, other than respond," said BHP Chairman Ross McEwan.

By March 9, gold itself joined the selloff as dollar strength and rising rate concerns outweighed safe-haven demand, leaving both bullion and mining equities under pressure. Key US inflation data due this week, the consumer price index on March 11 and the Federal Reserve's preferred Personal Consumption Expenditures index on March 13, could add further pressure, with the Fed widely expected to hold interest rates steady at its March 17–18 policy meeting.

“If we get some hot inflationary numbers ​this week, then that’s really going to put the Federal ​Reserve into ⁠kind of a quandary. It could see a further drop in gold prices,” Wyckoff said.