Gold Falls Again. Why Investors Are Turning to Other Iran War Havens. — Barrons.com

Mar 16, 2026, 09:42 GMT-41 min read

GOLD

By Alex Kozul-Wright

The price of gold fell early Monday but held onto the key $5,000 level, as the war in Iran entered its third week. For now tensions in the Middle East, are keeping markets on edge, though oil prices fell and stocks rose to the start the week.

Continuous gold futures fell by 0.6% to $5,033.40 an ounce, falling below the key $5,000 level at one point earlier in the day. Rising energy prices have fueled inflationary pressures and lowered the probability of an interest rate cut by the Fed. The yellow metal and interest rates typically move in opposite directions, as lower interest rates make nonyielding assets like gold more attractive, and vice versa.

Looking ahead, the market is pricing in a roughly 80% chance of less than two rate cuts between now and the first Federal Open Market Committee meeting of 2027 in January, according to the CME FedWatch Tool.

That's a drastic change from Feb. 27, the day before the war began, when the market had been pricing in a more-than 80% probability of at least two cuts. That key difference hasn't gone unnoticed by gold investors.

"The war has seen [U.S.] yield curves steepen, which has taken the wind out of gold investors' sails," said Derren Nathan, a researcher at Hargreaves Lansdown.

While the prospect of higher-for-longer interest rates has dissuaded investors from backing gold, it has provided a tailwind for the U.S. dollar. The DXY dollar index, which tracks the value of the greenback against a basket of its peers, gained 2.3% from Feb. 27 to early trading Monday.

Elsewhere, Bitcoin has rallied 10% during the same period, emerging as an unlikely hedge against global economic uncertainty.

Write to Alex Kozul-Wright at alexander.kozul-wright@barrons.com

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