Gold prices are facing downward pressure as tensions in the energy markets escalate. The ongoing conflict in the Middle East is driving oil prices higher, simultaneously raising fresh inflation concerns. Combined with a strengthening U.S. Dollar, the likelihood is increasing that the Federal Reserve will maintain higher interest rates for longer—an environment that is currently weighing on the safe-haven asset.
Gold Price Declines Amid Rising Oil Prices
The price of gold fell again on Monday, March 10, 2026. The precious metal was primarily impacted by a stronger U.S. Dollar and growing concerns about persistently high interest rates. Simultaneously, the conflict in the Middle East entered its second week, while the price of oil climbed towards $120 per barrel.
Gold briefly lost as much as three percent, falling to $5,015 per ounce, before a partial recovery. This continued a downward trend after the precious metal previously recorded its first weekly loss in over a month.
According to a Bloomberg report, major oil and gas producers in the Gulf region have reduced their output while the conflict between the U.S., Israel, and Iran shows no signs of de-escalation. Simultaneously, the U.S. Dollar rose against all major currencies. The Dollar Index increased by as much as 0.7 percent at one point.
The combination of rising energy prices and a stronger dollar is adding to the pressure on the gold market. Higher oil prices are fueling inflation concerns in the U.S., which in turn increases the probability that the Federal Reserve will keep interest rates at a high level for longer, or even raise them further. This dynamic impacts investor sentiment and risk appetite.
Inflation Concerns Weigh on Precious Metals
The 10-year benchmark yield rose to over 4.2 percent on Monday. Rising interest rates generally have a negative impact on precious metals. As borrowing costs increase and the dollar strengthens, gold often becomes less attractive to investors.
gold has recently been used as a source of liquidity. As global stock markets experience a stronger correction, some investors are selling safe havens like gold to offset losses in other asset classes or free up capital.
Despite the recent weakness, the performance of the precious metal remains strong year-to-date, rising approximately 18 percent since the beginning of the year.
A key driver is the continued high demand from central banks. The People’s Bank of China, in particular, has expanded its gold purchases and acquired more gold in February, extending its buying streak to 16 consecutive months.
Conflict and Monetary Policy in Focus
The future development of the gold price will largely depend on how the conflict in the Middle East evolves.
A relatively quick ceasefire could weaken the U.S. Dollar and oil price, making gold more attractive again. However, if the war continues for longer, both the dollar, and U.S. Treasury yields could rise further. Investors would then expect higher inflation, which would develop Fed rate cuts less likely.
Metal analyst Ed Meir of Marex Capital Markets stated in an analysis on March 7: “There’s a time to buy, a time to sell, and a time to simply wait. The latter is the preferred strategy at the moment.”
Conflict Drives Energy Prices
The conflict in the Middle East is now in its tenth day. Over the weekend, Tehran appointed a new supreme leader while continuing its attacks in the Persian Gulf. Israel, meanwhile, attacked fuel depots in the Iranian capital and threatened attacks on the Islamic Republic’s power grid.
Particularly critical for global energy markets are attacks on energy infrastructure and disruptions to shipping traffic through the Strait of Hormuz. This strait is one of the world’s most important trade routes, through which approximately one-fifth of global oil trade normally passes.
The disruptions have significantly increased both oil and gas prices, further contributing to inflation concerns in international markets.
Current Prices in the Precious Metals Market
On the spot market, the price of gold fell by nearly 1 percent to $5,120.39 per ounce (as of 6:58 a.m. In Frankfurt).
Other precious metals also came under pressure. Silver lost 0.5 percent and fell to $84.10. Platinum and palladium also declined.
The Bloomberg Dollar Spot Index rose by 0.5 percent, after rising by 1.3 percent the previous week.
FMW/Bloomberg
