Gold Drops as Iran War Sparks Inflation Fears and Boosts the Dollar

Gold has historically served as a safe haven during times of crisis, but the U.S.-Israeli war on Iran is pushing investors toward the dollar instead. Spot gold fell 1.2% to $5,109.39 per ounce while U.S. gold futures for April delivery lost 0.8% to $5,118.20. Oil prices surged more than 15% to levels not seen since mid-2022, driving inflation fears and pushing the dollar index to near three-month highs. Markets now widely expect the Federal Reserve to hold rates steady at its March 18 meeting, with odds of a June hold climbing above 51%, up from below 43% the week the war began. Silver fell 0.3% to $84.07 per ounce, platinum dropped 1% to $2,113.97, and palladium declined 1.3% to $1,604.09.