Precious metals experienced a collective downturn. During trading on March 23rd, the prices of gold and silver saw a sharp decline. Spot gold prices fell by nearly 4% at one point, hitting a low of $4,318 per ounce. Spot silver dropped nearly 5%, briefly falling below $65 per ounce. The Thailand Futures Exchange announced a temporary trading halt for online silver futures. The main silver futures contract on the Shanghai Futures Exchange fell over 8% intraday, breaking below 16,000 yuan per kilogram. Gold-related stocks also declined collectively. In the Hong Kong market, as of the latest update, Chifeng Gold plummeted over 24%, Lingbao Gold dropped more than 14%, and Laopu Gold fell over 10%. In the A-share market, Chifeng Gold dropped by the daily limit at the open, while Sichuan Gold declined over 9%.
Market analysts pointed out that since the outbreak of the Iran conflict, surging oil prices have heightened inflation risks and reduced the likelihood of near-term interest rate cuts by the Federal Reserve and other central banks. This is a bearish factor for gold, which does not yield interest. Additionally, gold may be facing pressure from liquidity-driven selling, as some economies might be selling portions of their gold reserves to raise cash.
This morning, gold and silver markets followed global equities lower. Intraday, spot gold fell nearly 4%, while COMEX gold futures dropped over 5%. Spot silver broke below $65 per ounce, declining nearly 5%, and COMEX silver futures plunged almost 7%, touching a low of $64.8 per ounce. As of the latest update, spot gold was still down more than 3%, spot silver fell nearly 4%, COMEX gold futures declined almost 5%, and COMEX silver futures were down over 6%.
Gold-related stocks suffered heavy losses. By the midday close in Hong Kong, Chifeng Gold was down 24.95%, Lingbao Gold fell 14.83%, while Laopu Gold, Datang Gold, and Wanguo Gold Group all dropped more than 10%. Tongguan Gold declined over 9%, and Shandong Gold was down over 8%. In the A-share market, Chifeng Gold hit the downside limit, Sichuan Gold fell over 9%, Shanjin International dropped more than 8%, Zhongjin Gold declined over 7%, and Hunan Silver, Zhaojin Gold, and Hengbang Shares all fell more than 6%.
Amid ongoing Middle East tensions, market expectations suggest that gold may be experiencing selling driven by liquidity needs. Ole Hansen of Saxo Bank noted speculation that some economies may need to raise liquidity, potentially including gold sales. The head of commodity strategy stated, "While this is not a confirmed driver, it adds to a more cautious tone." Hansen added, "Gold's failure to rise despite geopolitical pressure highlights that, in the current environment, the dominant roles of higher real yields, a stronger US dollar, and position adjustments have outweighed its traditional safe-haven function."
Mark Hackett, an analyst at Nationwide, indicated that traditional safe-haven assets are collectively underperforming. Bonds continue to weaken due to inflation and US budget concerns, while gold is falling in tandem. Money market funds have become the preferred safe haven for investors, suggesting that capital is parked on the sidelines rather than undergoing a systemic reallocation.
Rising oil prices are exacerbating inflation risks. During Asian trading hours, oil prices continued to climb. As of the latest update, WTI crude rose nearly 1% to $99.13 per barrel, while Brent crude increased 1.44% to $107.91 per barrel. Since the Middle East conflict began, surging oil prices have heightened inflation risks and reduced the likelihood of imminent rate cuts by the Fed and other central banks. This is an unfavorable factor for non-yielding gold.
Gold prices have fallen for eight consecutive trading days, recording the largest weekly decline since 1983. Part of the decline over the three weeks since the Iran conflict began on February 28 is attributed to forced selling by investors covering losses elsewhere in their portfolios.
Last weekend, US President Trump issued a 48-hour ultimatum to Iran, demanding it reopen the Strait of Hormuz or face airstrikes on its power plants. Iran responded that if its electrical facilities are attacked, it would "completely" close the strategic waterway and target energy, IT, and desalination infrastructure.
Trump's deadline was issued at 7:45 PM ET last Saturday. Based on that timing, the 48-hour window is set to expire around 7:45 PM ET on March 23, which is 7:45 AM Beijing time on March 24. As the deadline approaches, attention is focused not only on whether Iran will allow more ship passages but also on whether the US will escalate the standoff over strait access into direct strikes on Iranian critical infrastructure. The next step remains uncertain—whether tensions will ease or threats will turn into action.
According to reports, publicly available information suggests no formal documents have supplemented this "48-hour" ultimatum, and the timeline is widely interpreted based on Trump's social media post. This approach carries distinct political messaging: avoiding lengthy policy and legal procedures while quickly establishing a clear public countdown, simplifying a complex conflict into the single question of whether Iran will make substantive concessions before the deadline. For Trump, this continues his typical high-pressure negotiation style and helps him control the narrative domestically and internationally.
More importantly, Trump's move redefines the public objectives of the conflict. Recently, Trump suggested being "close to achieving goals," but with the Strait of Hormuz blocked, oil prices rising, and growing market concerns over global energy supply and inflation, the White House has clearly elevated "restoring strait passage" as a new benchmark for success. The Strait of Hormuz handles about 20% of global oil and liquefied natural gas shipments. A prolonged blockage would quickly impact oil prices, shipping, inflation, and consumer expectations. Focusing on strait access provides a more concrete goal than vague references to "weakening Iran" or "completing the mission," making it easier to explain to allies, markets, and voters.
Simultaneously, there are indications that Trump's move may not solely be about escalating pressure but could also be laying groundwork for potential diplomatic engagement. Reports suggest Trump's team has begun discussing possible negotiations with Iran, including terms such as reopening the Strait of Hormuz and long-term arrangements regarding Iran's nuclear and missile programs. In this context, the "48-hour" ultimatum, beyond its deterrent effect, may also serve to set preliminary topics and thresholds for future talks.
However, given that the US and Iran still have no direct contact and their conditions relayed through intermediaries remain far apart, the current phase is more accurately described as "applying pressure while preparing," rather than a shift toward negotiations.
Kyle Rodda, an analyst at Capital.com Inc., suggested that for technical reasons, "gold is poised for a short-term rebound." He noted that much depends on "whether Trump follows through on his threat to strike Iran's power plants." Gold's 14-day Relative Strength Index, a momentum indicator, fell further below 30, which some traders view as an oversold signal. Latest US government data showed that as of March 17, hedge funds and other large speculators increased their net long positions in gold to the highest level in seven weeks.