Gold Prices Fall as Dollar Strengthens and Rate Cut Hopes Fade
Gold prices dropped on Thursday, March 12, 2026. A firmer US dollar and lower expectations for quick Federal Reserve rate cuts weighed on the metal. Rising energy prices added to inflation worries and kept pressure on bullion.
Dollar Gains Make Gold Costlier
Spot gold fell 0.4 percent to $5,153.79 per ounce by 05:45 GMT. US gold futures for April delivery also declined 0.4 percent to $5,159.20. The US dollar rose 0.2 percent against major currencies. This increase made dollar-denominated gold more expensive for buyers using euros, yen or other units.
Nicholas Frappell from ABC Refinery pointed out the main drivers. He said dollar strength and the related interest-rate outlook create a headwind for gold. Geopolitical violence in the Middle East normally supports safe-haven demand. However, currency effects proved stronger on this day.
Oil Surge Fuels Inflation Concerns
Oil prices climbed above $100 a barrel after Iran attacked merchant ships. Iran warned that crude could reach $200 a barrel. The International Energy Agency called for a record release of strategic reserves to counter the shock. Iran placed about a dozen mines in the Strait of Hormuz. Tankers have stayed stranded for over a week. Some producers halted output because storage is nearly full.
These events raise serious inflation risks. Goldman Sachs delayed its forecast for Fed rate cuts. The bank now expects quarter-point reductions only in September and December.
US Inflation Data Adds to Caution
February’s US consumer price index rose 0.3 percent month-on-month. That matched forecasts and accelerated from January’s 0.2 percent gain. Annual CPI stood at 2.4 percent, also in line with expectations. Investors now await Friday’s release of the delayed January Personal Consumption Expenditures index. Many view PCE as a key guide for Fed policy.
Other Precious Metals Mixed
Spot silver dropped 0.5 percent to $85.33 per ounce. Platinum eased 0.3 percent to $2,162.24. Palladium gained 0.3 percent to $1,642.05.
The mix of a stronger dollar, higher oil-driven inflation fears and postponed rate-cut hopes kept gold under downward pressure despite ongoing tensions in the Middle East.
