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

The gold price fell in March 2026 temporarily to $4,100 per fine ounce – a decline of eight percent compared to the previous month. In the prior week, the precious metal recorded its largest weekly loss in around 43 years with a decline of more than ten percent, as Tagesschau reports. Particularly noteworthy: despite the escalation in the Iran conflict, gold currently offers 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 priced in USD, a robust dollar significantly increases the cost of the precious metal for international buyers. This dampens demand especially in Europe, where investors are confronted with an unfavorable exchange rate effect. Since the outbreak of war in Iran, the dollar exchange rate has risen again, after previously much was reported about dollar weakness.

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

Rising interest rate expectations intensify downward pressure

Rising yields and interest rate anxiety burden the precious metal further. Gold generates no interest – a decisive disadvantage compared to interest-bearing investments such as 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 does not function as it has in many other wars and crises as a so-called "safe haven." A safe haven is an asset into which investors flee in times of crisis to protect their capital. Instead, the factors of dollar exchange rate and interest rate expectations dominate market events – 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. The fundamental monetary factors completely overshadow 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 after the initial sell-off in late January, into the new geopolitical war environment. This technical starting point intensified the current downward pressure additionally.

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

Central banks withdraw support

Central banks have significantly reduced their gold purchases. In January 2026, worldwide net purchases totaled just 5 tonnes according to the World Gold Council – a dramatic collapse compared to previous years. In recent years, central banks were considered an important support for gold demand, particularly from emerging markets seeking to diversify their reserves.

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

Outlook: Dollar and interest rates remain decisive

For further price development, 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 relief, gold is likely to remain under pressure – regardless of the geopolitical situation. The current situation demonstrates that monetary factors can overshadow the traditional crisis logic of the gold market.

Investors in the DACH region must also factor in the double currency effect: In addition to the gold price quoted in USD, the weaker euro versus the dollar also burdens gold investment returns in the eurozone further.