Gold Under Pressure Despite Iran Crisis: Strong Dollar and US Job Data Weigh on Precious Metal

The gold price fell in March 2026 to as low as 4,100 US dollars per fine ounce – a decline of eight percent compared to the previous month. In the previous week, the precious metal recorded its largest weekly loss in around 43 years, down more than ten percent, as reported by Tagesschau. Particularly noteworthy: despite the escalation in the Iran conflict, gold is currently offering no protection for investors.

Strong Dollar Weighs on International Demand

The dominant trigger for current price pressure is the strong US dollar. Since gold is quoted in USD, a robust dollar significantly increases the cost of the precious metal for international buyers. This dampens demand, particularly in Europe, where investors face an unfavorable exchange rate effect. Since the outbreak of conflict in Iran, the dollar rate has been rising again, after there had been much discussion of dollar weakness beforehand.

A firm dollar generally exerts pressure on commodity prices, as Investing.com analyzes. This also explains why not only gold but also silver has lost considerable value. The structural pressure from the strong greenback thus dominates market dynamics more strongly than geopolitical crisis scenarios.

Interest Rate Expectations Intensify Downward Pressure

Rising yields and interest rate concerns are placing additional strain on the precious metal. Gold generates no interest – a decisive disadvantage compared to interest-bearing investments like government bonds, when interest rate expectations rise. Liquidity pressure currently dominates market dynamics and overshadows the traditional safe-haven function of the yellow metal.

Iran Crisis Does Not Support Gold – A Paradox

Despite the escalation in the Iran conflict and associated geopolitical tensions, gold is not functioning as the so-called "safe haven" that it has during many other wars and crises. A safe haven is an asset into which investors flee during times of crisis to protect their capital. Instead, the factors of dollar exchange rate and interest rate expectations dominate market activity – an unusual pattern that characterizes the current market situation.

Gold is thus anything but the safe haven in the Iran war that investors would traditionally expect. Fundamental monetary factors are completely overriding the geopolitical risk premium.

Oversold Momentum After Two-Year Rally

After two years of spectacular rally, gold was heavily overbought on a weekly and monthly basis, as Gold.de reports. The precious metal stumbled, already somewhat weakened by the initial sell-off in late January, into the new geopolitical war environment. This technical starting point further exacerbated the current downward pressure.

The overbought market situation led profit-taking and technical sell signals to intensify the price decline. Investors who had benefited from the gold rally over the past two years used the high price level for sales – precisely at a time when geopolitical crises would normally trigger purchases.

Central Banks Pull Back

Central banks have significantly reduced their gold purchases. In January 2026, global net purchases amounted to just 5 tons according to the World Gold Council – a dramatic collapse compared to previous years. Central banks had been regarded in recent years as an important support for gold demand, particularly from emerging markets seeking to diversify their reserves.

The withdrawal of these institutional buyers removes an important source of demand from the gold market. This further intensifies price pressure, since private investors alone cannot compensate for the demand gap.

Outlook: Dollar and Interest Rates Remain Decisive

For future price developments, the factors of dollar strength and interest rate expectations are likely to remain decisive. As long as the US dollar remains robust and interest rate markets signal no relaxation, gold is likely to remain under pressure – regardless of the geopolitical situation. The current situation shows that monetary factors can override the traditional crisis logic of the gold market.

Investors in the DACH region must also account for the double currency effect: in addition to the gold price quoted in USD, the weaker euro against the dollar further weighs on the return of gold investments in the eurozone.