Gold steadies as US and Iran offer divergent routes to end war

Published Thu, Mar 26, 2026 · 09:29 AM

[SINGAPORE] Gold steadied after a modest two-day recovery, as traders weighed conflicting statements from the US and Iran about negotiations to end the war in the Middle East.

Bullion was near US$4,520 an ounce in early trading, having gained more than 2 per cent over the previous two sessions. The White House insisted that talks with Iran are taking place and has compiled a 15-point peace proposal, while Teheran publicly rejected US overtures to end the conflict and issued conditions of its own. Even as it pursues diplomacy, the US has ordered thousands of troops to the region, fuelling fears of a risky ground invasion.

Since the war began nearly a month ago, gold has fallen nearly 15 per cent, moving largely in tandem with stocks and in an inverse relationship with oil. Spiking energy prices have raised the risk of inflation and led investors to bet that central banks will keep interest rates unchanged or hike them. That’s a headwind for non-yielding bullion.

The prospect of a rate hike by the US Federal Reserve may be moderated by the risk of an economic downturn in the US caused by a protracted war. Wall Street is cutting its forecasts for the American economy this year, boosting its projections for inflation and unemployment and nudging up the odds of a recession.

“Frothy positioning is likely to remain vulnerable in the near term,” analysts from Standard Chartered, including Sudakshina Unnikrishnan, said.

Around 85 tonnes of gold holdings in exchange-traded funds have been redeemed since the war began, according to a Bloomberg calculation. Even at US$4,500 an ounce, a further 83 tonnes of holdings remain loss-making and therefore vulnerable to liquidation, the Standard Chartered analysts said. That’s around US$12 billion based on gold’s closing price on Wednesday.

Spot gold rose 0.4 per cent to US$4,522.60 an ounce at 8.13 am Singapore time. Silver advanced 0.4 per cent to US$71.52. Platinum and palladium also gained. The Bloomberg Dollar Spot Index was flat after ending the previous session up 0.2 per cent. BLOOMBERG