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Big news for gold buyers! A slight rise has been seen in the prices of gold on Tuesday i.e. March 31, but this shine is in the shadow of a big record fall. In fact, gold is currently moving towards its biggest monthly decline in more than 17 years. Investors are now shifting from gold to the dollar, which they consider more secure in these uncertain times.

Impact of Middle East war and inflation

The main reason for this historic upheaval in gold prices is the ongoing war in the Middle East. This conflict has created fears of rising inflation across the world. Economic experts believe that strict monetary policies can be adopted to deal with rising inflation, which has a direct impact on the bullion market.

Gold lost more than 13%: worst situation since October 2008

This month, a huge fall of more than 13% has been recorded in the prices of gold. This is the biggest monthly decline since October 2008. However, if we look at it on a quarterly basis, prices are still up by about 5%. Recall that on January 29, gold had touched a record high of $5,594.82, but at present the prices have fallen by about 18.70% from its all-time high.

Tim Waterer, Chief Market Analyst at KCM Trade, says that many traders are still considering gold as a ‘value investment’. Falling oil prices and the movement of the dollar have provided some support to prices today, but the pressure still remains.

Dollar wins as safe investment

Usually, whenever there is a crisis in the world, people increase investment in gold. But this time, rising energy prices due to war have increased expectations of increase in interest rates. In such a situation, investors are running towards ‘cash’ i.e. dollars. Due to America being an energy exporter, the dollar has emerged as the strongest and safest asset at this time. The dollar is on track for its biggest monthly gain since July.

The oil game and the future of gold

Market experts have now almost given up expectations of a cut in US interest rates this year. According to Tim Waterer, if the Strait of Hormuz remains closed, oil supplies will be affected and prices could skyrocket. Rising oil prices due to the Iran conflict are putting pressure on gold.

Although, goldman sachs Has predicted a positive future. He believes that due to continuous buying by central banks and a possible softening of the Federal Reserve’s stance, the price of gold could reach $5,400 per troy ounce by the end of 2026.

Condition of silver and other metals

Along with gold, other metals also continue to fluctuate. Spot silver rose 2.7% to $71.89 on Tuesday, while platinum and palladium were also up 1% to 1.5%. But if we talk about the entire month of March, these three metals have also fallen by about 20%.