The move marked a notable reversal for a market that had been under heavy pressure for much of March. Gold, which often benefits from geopolitical stress, had instead come under strain as the conflict centred on Iran drove oil sharply higher, strengthened inflation concerns and weakened expectations for faster interest-rate cuts in the United States. That unusual pattern left bullion on course for its worst monthly performance since 2008 even as safe-haven demand flickered back on days of acute uncertainty. By 31 March, spot gold had rebounded to about $4,652 an ounce, though the metal still faced its steepest monthly drop in more than 17 years.
Market participants said the late-March rebound appeared to be driven less by a wholesale return to safety and more by dip-buying after a bruising sell-off. Traders were also watching political signals for any hint that the military confrontation might not broaden further. That matters because gold’s trajectory has been shaped by two competing forces: demand for havens during war risk, and concern that higher energy prices will keep inflation elevated and central banks cautious. When the second force dominates, gold can lose momentum despite global instability because higher rates increase the appeal of yield-bearing assets and push up the opportunity cost of holding bullion.
Other metals joined the rebound. Spot silver jumped 4.4% to $71.01 an ounce in the market report widely circulated that day, while platinum rose 3% to $1,882.05 and palladium advanced 3.7% to $1,403.54. The breadth of the gains suggested the rally was not confined to gold alone, though each metal continues to trade on its own industrial and investment dynamics. Silver, with its dual role as a precious and industrial metal, has remained especially sensitive to broader swings in growth expectations, while platinum and palladium are also influenced by demand from the automotive and manufacturing sectors.
Underlying support for gold remains substantial despite the volatility. The World Gold Council said total gold demand in 2025, including over-the-counter trading, exceeded 5,000 tonnes for the first time, helped by strong investment flows and sustained central bank buying. That longer-term backdrop has encouraged some investors to treat sharp declines as opportunities to rebuild positions rather than as evidence that the broader bull market has ended. Even after March’s setback, futures prices remained well above where they stood a year earlier, underlining how far the market has climbed over the past several quarters.
Still, the near-term outlook is far from settled. Oil prices were heading towards record monthly gains at the end of March, with Brent crude rising above $112 a barrel and U. S. crude climbing past $102 as markets assessed the risk of disruption around the Strait of Hormuz. Those energy costs have fed directly into inflation worries in the United States, Europe and Asia, complicating the policy outlook for central banks. Federal Reserve Chair Jerome Powell said the U. S. central bank was in a position to wait and assess how the war-driven shock would affect inflation and growth, a stance that has kept investors highly sensitive to every economic release and geopolitical signal.
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