Gold & Silver Plunge 5-10% as Iran War Fears Grip Markets – March 2026 Update

Gold and silver prices experienced a sharp decline on Thursday, with spot gold falling nearly 5% to below $4,600 an ounce and front-month gold futures dropping almost 6% to around the same level, as the U.S.-Iran war continued to escalate and fuel inflation concerns. The sell-off extended to related assets, with the ProShares Ultra Silver ETF shedding 20% in premarket trading and the iShares Silver Trust ETF falling almost 10%.

The downturn in precious metals coincided with a broader risk-off sentiment across global markets, impacting equities and government bonds. European stocks moved sharply lower in early trade, and U.S. Equity futures signaled further declines at the open. Investors are closely monitoring the ongoing conflict between the U.S. And Iran, now entering its third week, and its potential to disrupt global energy markets.

Oil and gas prices surged on Tuesday following strikes on energy facilities in Iran and Qatar, exacerbating fears of an energy shock and adding to inflationary pressures. The U.S. Federal Reserve acknowledged the “uncertain” impacts of the conflict when it held interest rates steady on Wednesday, projecting only one rate cut this year, contingent on slowing inflation. Similarly, the Bank of Japan maintained its current interest rates, citing rising inflation risks linked to the war in Iran.

Several European central banks, including those of the U.K. And the Eurozone, are scheduled to announce their monetary policy decisions later on Thursday. Switzerland’s central bank also cited the war in Iran as a factor in its decision to hold its key policy rate steady, even as also indicating a growing willingness to intervene in foreign exchange markets.

Despite a record-breaking rally in 2025 – with gold surging 66% and silver climbing 135% – both metals have experienced increased volatility in 2026. Silver futures, in particular, suffered their largest single-day decline since the 1980s earlier this year.

Analysts suggest that the current sell-off reflects a shift in investor sentiment. Paul Surguy, managing director and head of investment management and proposition at Kingswood Group, noted that gold had benefited from a “fair tailwind” but that the broader market backdrop may be prompting investors to reassess their holdings. “Global markets have seen broad selloffs as investors search for the quickest assets to sell,” Surguy said, adding that the logistical challenges of transporting gold amid airspace and shipping closures could also be a factor.

Iain Barnes, CIO at British wealth management firm Netwealth, attributed the increased volatility in gold prices to its growing inclusion as a popular financial asset across investment portfolios. “Financial, rather than fundamental investors are the marginal buyers of gold and we observe them reducing risk across the board,” Barnes stated. He also pointed to higher borrowing costs for fast-moving, leveraged funds as a contributing factor.

Dan Coatsworth, head of markets at AJ Bell, observed that the decline in gold prices could indicate investors liquidating previously successful assets or reacting to a strengthening U.S. Dollar. “Gold often declines when the U.S. Dollar appreciates as the metal becomes more expensive for buyers of other currencies,” Coatsworth explained.

Mining stocks also felt the impact of the precious metals sell-off. Teck Resources fell 8.9%, while First Majestic Silver and Coeur Mining dropped 10% and 9.9%, respectively. The Stoxx Europe Basic Resources index traded 6% lower, with Fresnillo, the world’s leading silver producer, down 9.3% and Antofagasta down 8.2%.