Gold prices fall sharply as USD strengthens again

Gold prices fell sharply in Thursday trading (April 2) as the dollar strengthened again, with oil prices surging after President Donald Trump’s remarks about a potential war between the United States and Iran. After strong net buying in the prior session, the SPDR Gold Trust, the world’s largest gold ETF, paused to watch in this session. At the close, spot gold in New York traded at 4,678 USD per ounce, down 81.5 USD/oz from the previous day’s close, corresponding to a 1.7% drop, according to data from Kitco. Spot silver fell 2.08 USD/oz, down 2.8%, to 73.15 USD/oz. On the COMEX futures market, June 2026 gold futures fell 110.4 USD/oz, a decline of 2.3%, settling at 4,702.7 USD/oz. The session saw strong volatility in gold prices before and after Trump’s live speech. Before the White House leader spoke at 9 p.m. local time, spot gold briefly topped 4,800 USD/oz, the highest in two weeks. However, after Trump spoke, prices at times slipped to around 4,550 USD/oz, representing more than a 5% drop from the session high. Trump said the US-Iran military confrontation would end in 2–3 weeks, and in the meantime, US forces could strike Iran “particularly hard” to push the country back to the “stone age.” The remarks dampened investors' earlier hopes for a de-escalation. Oil prices surged after the speech, with WTI futures in New York closing up more than 11% and Brent in London up nearly 8%. The sharp rise in oil prices continued to raise inflation fears and the likelihood that central banks would keep rates higher for longer, implying a less favorable environment for a non-yielding asset like gold. The dollar also rose along with oil after having fallen in the previous session on hopes tensions in the Gulf would ease. The Dollar Index finished up 0.37% at 100.02, adding pressure on precious metals. “Markets are very focused on Trump’s remarks. What he said shows no sign of a quick solution to the current energy crisis,” said David Meger, head of precious metals trading at High Ridge Futures, to Reuters. Gold is traditionally seen as an inflation hedge and a safe haven for geopolitical risk, but those roles are not performing well currently. Instead, gold prices are largely driven by the value of the USD and the outlook for rate hikes. Recently, markets no longer expect the Federal Reserve to cut rates this year. Before the conflict, traders priced in two rate cuts in 2026. [Image caption: Gold price movements over the last month; unit: USD/oz; Source: Trading Economics.] Gold price movements in the last month; unit: USD/oz; Source: Trading Economics. Investor sentiment in gold was also affected after news that the Turkish central bank sold net more than 69 tonnes of gold in the previous week, reducing holdings to 702.5 tonnes. In two weeks, Turkey sold 118 tonnes of gold to mobilize foreign currency to defend the lira from weakness due to tensions in the Gulf. Analysts warn that a protracted conflict could force many emerging market economies like Turkey to sell more gold reserves to defend their currency and to secure foreign currency for imports. SPDR Gold Trust, the world’s largest gold ETF, did not change its holdings on Thursday, keeping holdings at 1,051 tonnes. Earlier, the fund had bought nearly 5 tonnes in two sessions. In March, the fund sold 54 tonnes. According to Reuters, the substantial drop in gold has prompted some moves in two major physical gold markets in Asia, India and China. In India, domestic gold retail prices rose above the official gold price for the first time in two months, calculated as international spot price plus 6% import duty and 3% consumption tax — driven by the price decline boosting buying interest. In contrast, in China, the premium of domestic gold over international prices eased slightly as buyers waited for deeper price declines. Compared with international prices, domestic gold was about 15 USD/oz higher, roughly 480,000 VND per tael. On Friday, U.S. financial markets, including gold exchanges, closed for the Easter holiday.