The gold market endured one of its most volatile trading sessions in recent memory this Monday, a dramatic swing driven by a 48-hour ultimatum, a social media post from former President Donald Trump, and a staggering $14 plunge in oil prices. In a matter of hours, the trading range for the precious metal stretched to over $300.
Interest Rates and a Fading Risk Premium
Beneath the day’s sharp recovery lies a more concerning trend for gold bulls. Since hitting a record high near $5,594 in January, the metal’s value has eroded by more than 20%. March 2026 is on track to record the most severe monthly decline since 1975.
This sustained pressure stems from a dual force. First, any headline suggesting geopolitical de-escalation strips away the metal’s risk premium. Simultaneously, rising yields on 10-year U.S. Treasury notes—recently at 4.4%—increase the opportunity cost of holding the non-yielding asset. Market strategists also note that during periods of extreme uncertainty, gold is increasingly being sold as a source of liquidity, which can amplify downward price moves in the short term.
The sell-off hit silver even harder. Trading around $61.76 per ounce, the industrial metal now sits at nearly half the value of its February peak.
Should investors sell immediately? Or is it worth buying Gold?
From Annual Low to Afternoon Rally
The session began with spot gold plunging to approximately $4,100 in early trading—its lowest level since October 2025. This represented a single-day loss exceeding 8%. The trigger was escalating tensions around the Strait of Hormuz, following a U.S. ultimatum to open the strategic waterway and threats of military strikes against Iranian energy infrastructure.
The reversal was delivered via social media. Trump announced a five-day delay to the planned strikes, citing “productive talks” with Tehran. This came despite an immediate denial of any official negotiations from Iranian Parliament Speaker Mohammad Bagher Ghalibaf. Financial markets reacted instantly: Brent crude oil fell from above $114 to briefly trade under $100, while gold staged a recovery, climbing back above $4,400 by the afternoon.
Miner Stocks Defy the Spot Price
An interesting divergence emerged during the turmoil. While the gold price cratered, shares of major mining firms Newmont and Barrick Gold managed to hold modest gains during European trading. This suggests investors are increasingly decoupling producer valuations from short-term noise in the commodity’s spot price.
All eyes are now on the next five days, as the deadline of Trump’s ultimatum passes. This period will determine whether the geopolitical risk premium is set for a comeback or is permanently being factored out of gold’s market price.
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