Trump Threatens More Strikes! Gold Plunges Below 5000 Mark, This Technical Signal is Dangerous

Hot Topics

Selected Stocks Data Center Market Center Capital Flows Simulated Trading

Client

Source: 24K99

On Monday (March 16), international gold prices initially fell nearly 1% during trading, slipping below the 5000 mark, but then stabilized. A weaker US dollar and safe-haven demand offset some of the concerns caused by high energy prices and the reduced expectation of short-term US rate cuts.

As of the time of writing, spot gold dipped 0.72% to $4,984, rebounding slightly from an over three-week low touched earlier in the session. Meanwhile, the US dollar edged lower, making dollar-denominated commodities like gold cheaper for investors holding other currencies.

The yield on the 10-year US Treasury fell, increasing the appeal of non-yielding assets like gold.

US President Donald Trump stated on Sunday that his administration is in discussions with seven countries to help ensure the security of the Strait of Hormuz. Trump also threatened to strike Iran’s main oil export hub, Hegra Island, further, and said he is not yet ready to reach an agreement to end the conflict.

OCBC Bank strategist Christopher Wong said, “As the market weighs multiple macro factors, gold prices remain generally stable. Ongoing geopolitical tensions continue to support safe-haven demand, but rising oil prices have reignited inflation concerns.”

With the US and Israel entering the third week of their conflict with Iran, oil prices remain above $100 per barrel. The risk to oil infrastructure, the continued closure of the Strait of Hormuz, and the ongoing disruptions represent one of the most severe shocks to global supply in history.

Rising crude oil prices can lead to inflation through higher transportation and production costs. Gold is often viewed as an inflation hedge, but high interest rates tend to boost the attractiveness of yield-bearing assets, which can weaken gold’s appeal.

Wong noted, “In the short term, as the market reassesses the Federal Reserve’s policy path and real yields, gold prices may continue to be volatile.”

Federal Reserve Decision Approaching

The market widely expects the Fed to keep interest rates unchanged at the second consecutive meeting on Wednesday, but investors will closely watch Chair Jerome Powell’s comments for clues about future policy directions.

International benchmark Brent crude remains above $100 per barrel, further fueling inflation fears and dampening hopes for rate cuts.

Whether spot gold can sustain above $5,000 will likely be a key factor in its short-term trend. Pepperstone strategist Dilin Wu said in a report that if the $5,000 level is clearly broken, gold could further decline to support levels between $4,850 and $4,900. Conversely, if gold stabilizes, resistance levels to watch are $5,100 and $5,250.

He added that a strengthening dollar and leveraged long positions being closed could continue to pressure gold prices, while institutional buying and central bank purchases provide support. He also warned that escalating geopolitical tensions or hawkish signals from the Fed could trigger larger swings.

Short-term Market Sentiment Shift

Analysts note that gold briefly fell below $5,000 after months of strong gains, reflecting a short-term shift in market sentiment and a re-evaluation of macroeconomic conditions affecting precious metals pricing.

From a market structure perspective, the previous rapid rise in precious metals was driven by safe-haven demand, cooling inflation expectations, and continued accumulation by central banks and institutions. However, after the Middle East conflict erupted, gold and silver prices declined instead of rising, indicating that a large amount of short-term profit-taking has begun, leading to technical corrections. Silver, with its smaller market size, tends to exhibit greater volatility during outflows.

Additionally, changes in macroeconomic expectations have also exerted pressure on precious metals. Iran’s control of the Strait of Hormuz has heightened concerns about tightening energy supplies, pushing energy prices higher and driving global oil prices up. This further raises inflation expectations worldwide, which may cause central banks to adopt a cautious stance on interest rate adjustments.

In the long term, this correction does not necessarily mean the end of the precious metals bull market. Historically, metals often undergo several significant corrections during upward cycles. The fundamental drivers supporting precious metals remain intact; amid global economic uncertainty, geopolitical risks, and an unstable monetary system, gold and silver still hold long-term investment value.

In recent years, central banks have continued to increase their gold holdings, providing long-term support to the market. Unlike gold, which is mainly valued for its financial attributes, silver also has notable industrial uses.

The development of renewable energy, photovoltaics, and electronics has driven sustained growth in industrial demand for silver. During economic recoveries, silver often benefits from additional industrial demand.

However, as a safe-haven asset, silver’s allocation logic is not yet widely accepted. Its higher volatility makes it more prone to being classified as a high-risk asset, and its deep involvement in speculative trading can sometimes cause it to diverge from traditional safe-haven assets.

From a macro perspective, given the current high levels of global uncertainty and rising inflation expectations, this round of precious metals bull market still has a solid fundamental basis. Short-term corrections help clear out some short-term funds, reducing volatility in safe-haven assets.

Sina Cooperation Platform Futures Account Opening — Safe, Fast, Reliable

Sina Statement: This message is reprinted from Sina cooperative media. The publication of this article on Sina.com is for the purpose of conveying more information and does not imply endorsement of its views or verification of its content. The article is for reference only and does not constitute investment advice. Investors operate at their own risk.

Massive Information, Precise Analysis, All on Sina Finance APP

Editor: Zhu Henan