Gold Price Drop: Iran-Israel Conflict & Market Analysis

Fighting between Israel, the United States, and Iran entered its fourth day on March 4, 2026, sending tremors through financial markets. Ali Laricani, Secretary General of Iran’s Supreme National Security Council, denied reports that Tehran had initiated talks with Washington to de-escalate the conflict, stating definitively that Iran would not negotiate with the U.S. Simultaneously, the Israel Defense Forces launched new airstrikes targeting the Iranian capital, Tehran, and locations in Lebanon.

The escalating conflict has coincided with a downturn in gold prices. As of this morning, the price of gold in the Grand Bazaar of Istanbul fell below 7,400 Turkish Lira per gram. Spot prices dipped below 7,200 TL.

The initial surge in gold prices, driven by investor flight to safe-haven assets amid fears of a prolonged regional war, has begun to reverse. According to Belgin Maviş, Founding Partner of BLG Financial Consultancy, the current situation is fraught with risk. “The Middle East is a firestorm… Tehran’s attacks on Lebanon, Qatar, and the UAE, as well as the British airbase in South Cyprus, continue to increase anxiety worldwide,” Maviş stated.

Maviş cautioned that the conflict is unlikely to be resolved quickly, noting Iran’s capacity to sustain operations even with leadership losses. “this situation, including the potential closure of the Strait of Hormuz, will have serious negative effects on world trade, especially regarding oil and commodity prices. In particular, sharp increases in natural gas prices could severely disrupt the fight against inflation.” Crude oil prices have risen to around $80 a barrel. Stock markets opened sharply lower on Monday.

Reports indicate that oil-producing countries are considering increasing production, but Israel’s counterattacks, coordinated with the U.S., both in Beirut and Iran, suggest the conflict may be protracted.

Analysts point to key technical thresholds in the gold market. The spot price of $5,410 is being watched as a critical resistance level; breaching this could accelerate gains to $5,506. Conversely, $5,302 is identified as a strong support level, with a break below potentially driving prices down to the $5,194-$5,253 range.

Maviş added, “It depends on whether China takes steps on the commodity side. We will be looking at potential limits on transactions or collateral requirements. As long as the risks continue, the increases in both gram gold and gram silver will continue.” She predicted potential sales above 135 TL in silver, with possible pullbacks to the 120-115 TL range. For gold, she anticipates movement between 7,350 TL and 8,200 TL, depending on developments.

The historical spread between buying and selling prices for gold has narrowed. Current prices as of March 4, 2026, are: Gram gold – Buying: 7,308.53 TL, Selling: 7,309.49 TL; Quarter gold – Buying: 12,076.00 TL, Selling: 12,241.00 TL; Ounce gold – Buying: $5,169.93, Selling: $5,170.71; Republic gold – Buying: 48,138.00 TL, Selling: 48,685.00 TL; Grand Bazaar gold – Buying: 7,389 TL, Selling: 7,505 TL.

Turkish Foreign Minister Hakan Fidan stated on March 3, 2026, that the conflict carries the risk of escalating into a regional war, emphasizing the need for a swift cessation of hostilities and a return to diplomacy. He highlighted concerns about the potential impact on the global economy, particularly regarding the security of energy infrastructure and the Strait of Hormuz. Fidan as well noted that Iran targeting U.S. Bases in the region could further escalate the security crisis, and the closure of the Strait of Hormuz could cause significant disruption to global financial and energy markets.

According to Fidan, the most negative scenario would be an escalation of the conflict into a wider regional instability involving Iran and surrounding countries. He reiterated Turkey’s desire for a return to diplomacy in all contacts. Fidan also indicated that Israeli Prime Minister Benjamin Netanyahu aims to eliminate Iran as a long-term threat, potentially through military weakening or regime change.