<p><a href="https://www.deccanherald.com/tags/gold-prices">Gold slid</a> more than 5 per cent on Monday, reaching its weakest level of 2026 after logging its worst week in about 43 years, as an escalating Middle East conflict stoked inflation concerns and raised expectations of higher global interest rates.</p><p>Spot gold fell 5.8 per cent to $4,226.16 per ounce as of 0633 GMT, its lowest since December 11, and extended losses into a ninth straight session.</p><p>The metal dropped more than 10 per cent last week, its worst week since February 1983, and has also retreated more than 20 per cent from its record peak of $5,594.82 an ounce reached on January 29.</p><p>US gold futures for April delivery fell 7.5 per cent to $4,231.80.</p><p>"With the Iranian conflict into its fourth week, and oil prices hanging around the $100 level, expectations have pivoted from rate cuts to potential rate hikes, which have tarnished gold's appeal from a yield point of view," said Tim Waterer, chief market analyst, KCM Trade. Iran said on Sunday it would strike the energy and water systems of its Gulf neighbours in retaliation if US President <a href="https://www.deccanherald.com/tags/donald-trump">Donald Trump</a> follows through with his threat to hit Iran's electricity grid in 48 hours.</p><p>Asian shares fell, and oil prices stayed well above $110 a barrel.</p> .West Asia conflict | ‘You are fired’: Iran's IRGC pulls no punches, mocks Donald Trump with his own phrases amid US' Hormuz ultimatum.<p>"Gold's high liquidity appears to be hurting it during this risk-off period. Downturns in stock markets are leading to gold portions being closed to cover margin calls on other assets," Waterer said.</p><p>The closure of the Strait of Hormuz has kept crude elevated, stoking inflation fears by pushing up transport and manufacturing costs. While rising inflation typically boosts gold's appeal as a hedge, high rates curb demand for the non-yielding asset.</p><p>"A reinforced shift from safe-haven allocation towards macro-driven positioning could skew risks further to the downside, as a firmer US dollar and the receding probability of the Fed easing dominate the narrative," said BMI, a unit of Fitch Solutions. Market pricing for a US Federal Reserve rate hike this year has shot up, with rate futures showing the US central bank is more likely to raise interest rates than cut them by the end of 2026, according to CME's FedWatch tool.</p><p>Other precious metals also declined sharply, with spot silver declining 8.9 per cent to $61.76 per ounce. Spot platinum slipped 9% to $1,749.31 and palladium shed 5.2 per cent to $1,330.50.</p>
<p><a href="https://www.deccanherald.com/tags/gold-prices">Gold slid</a> more than 5 per cent on Monday, reaching its weakest level of 2026 after logging its worst week in about 43 years, as an escalating Middle East conflict stoked inflation concerns and raised expectations of higher global interest rates.</p><p>Spot gold fell 5.8 per cent to $4,226.16 per ounce as of 0633 GMT, its lowest since December 11, and extended losses into a ninth straight session.</p><p>The metal dropped more than 10 per cent last week, its worst week since February 1983, and has also retreated more than 20 per cent from its record peak of $5,594.82 an ounce reached on January 29.</p><p>US gold futures for April delivery fell 7.5 per cent to $4,231.80.</p><p>"With the Iranian conflict into its fourth week, and oil prices hanging around the $100 level, expectations have pivoted from rate cuts to potential rate hikes, which have tarnished gold's appeal from a yield point of view," said Tim Waterer, chief market analyst, KCM Trade. Iran said on Sunday it would strike the energy and water systems of its Gulf neighbours in retaliation if US President <a href="https://www.deccanherald.com/tags/donald-trump">Donald Trump</a> follows through with his threat to hit Iran's electricity grid in 48 hours.</p><p>Asian shares fell, and oil prices stayed well above $110 a barrel.</p> .West Asia conflict | ‘You are fired’: Iran's IRGC pulls no punches, mocks Donald Trump with his own phrases amid US' Hormuz ultimatum.<p>"Gold's high liquidity appears to be hurting it during this risk-off period. Downturns in stock markets are leading to gold portions being closed to cover margin calls on other assets," Waterer said.</p><p>The closure of the Strait of Hormuz has kept crude elevated, stoking inflation fears by pushing up transport and manufacturing costs. While rising inflation typically boosts gold's appeal as a hedge, high rates curb demand for the non-yielding asset.</p><p>"A reinforced shift from safe-haven allocation towards macro-driven positioning could skew risks further to the downside, as a firmer US dollar and the receding probability of the Fed easing dominate the narrative," said BMI, a unit of Fitch Solutions. Market pricing for a US Federal Reserve rate hike this year has shot up, with rate futures showing the US central bank is more likely to raise interest rates than cut them by the end of 2026, according to CME's FedWatch tool.</p><p>Other precious metals also declined sharply, with spot silver declining 8.9 per cent to $61.76 per ounce. Spot platinum slipped 9% to $1,749.31 and palladium shed 5.2 per cent to $1,330.50.</p>