NEW YORK, March 18, 2026, 13:40 EDT
Gold slumped Wednesday, dropping to its lowest point in over a month as the dollar strengthened and another surge in oil prices cemented expectations for the Federal Reserve to stick with elevated rates. Spot bullion slid 2.6% to $4,874.19 an ounce by 11:14 a.m. ET, hitting its softest mark since Feb. 6. April U.S. gold futures were also down 2.6%, settling at $4,878.20.
This comes after gold managed to stay above $5,000 as of Tuesday, despite the Iran war entering its third week. But now, the ongoing conflict is driving up energy prices and stoking inflation worries—enough to outweigh safe-haven flows. With rates still elevated, gold, which offers no yield, is up against it.
All eyes are on the Fed’s 2 p.m. ET announcement. Traders aren’t expecting a move on rates — officials are seen holding steady in the 3.50%-3.75% band. What’s got people talking is the dot plot, those quarterly projections. A report flagged that some economists think a few policymakers might pencil in an even higher year-end rate.
The mood soured after Wednesday’s strikes targeted Iran’s Pars gas field—the first attack of the war to hit Iranian energy facilities in the Gulf. Brent crude surged to $108.51 per barrel. Tehran urged neighboring countries to clear out energy sites, stoking fresh concern that the oil spike could spill over into broader price pressures.
New numbers out of the U.S. pushed things along. Producer prices jumped 0.7% in February—a sharp move higher, outpacing the 0.3% rise economists had penciled in, according to the Labor Department and a Reuters poll. The annual rate touched 3.4%, marking the quickest pace in a year. Now, markets are bracing for just one Fed rate cut in 2026.
David Meger, who heads metals trading at High Ridge Futures, pointed to rising energy prices as “fanning the fire of inflation” and dragging on bullion. Capital Economics’ North America economist Thomas Ryan noted the recent price data doesn’t give the Fed much incentive to cut rates again in the near term, even if oil prices quickly drop. Reuters
Gold’s hanging in what Kitco’s Jim Wyckoff terms a “balancing act”—caught between safe-haven buying and pressure from rates. New record highs? Still on the table, he said, but “not anytime soon.” For now, the bulls look like they’ve “run out of gas.” Reuters
Sellers hit across the board. Spot silver gave up 3%, settling at $76.90. Platinum slipped 3.2% to $2,056.05, while palladium tumbled 4.5% to $1,528.75. In Toronto, the materials index—packed with miners—plunged 4.5% as precious metals came under pressure.
What happens in the next few hours could prove decisive. KPMG economist Diane Swonk expects the Fed’s new projections to capture the tension between sluggish growth and persistent inflation. Over at Reuters, some forecasters are quoted saying policymakers might keep the door ajar for another rate hike.
Still, momentum may not last. If the Fed talks down its hawkish stance or safe-haven demand ramps up, fresh buyers could reappear. On the flip side: a firmer dollar, crude topping $100, or hints of elevated borrowing costs could knock gold back below its recent highs.
