Shares of SPDR Gold Shares (GLD) plunged 3.1% to $403.52 Thursday, erasing Wednesday's rally in full, after Iran flatly rejected Washington's 15-point peace plan and countered with demands for sovereignty over the Strait of Hormuz. Iran's state media reported the country would reject the U.S. ceasefire offer, with its five-point counteroffer demanding Tehran be given control over the strait — a condition widely seen as a nonstarter. The collapse of diplomacy matters for gold holders because it triggered a chain reaction across oil, bonds, and currencies that all work against the metal.
• $100 Oil Is Fueling Inflation Fears, Not Gold Demand. Brent crude crossed $100, settling at $103.81 a barrel, while WTI reached $91.76 . Normally, geopolitical chaos sends investors rushing into gold. This time, the opposite happened. The oil surge sent stagflation fears racing globally and forced central banks — led by a hawkish Fed — to signal no interest rate cuts in 2026 . Higher rates raise the "opportunity cost" of owning gold, which pays no interest or dividends, making bonds and cash relatively more attractive.
• Rising Treasury Yields Are Stealing Gold's Thunder. The 10-year Treasury yield rose above 4.4% on Tuesday, its highest level in eight months , before pulling back slightly to around 4.33% on ceasefire hopes that quickly evaporated. Fed Governor Michael Barr said the central bank may need to keep rates elevated "for some time" to address inflation . When investors can earn over 4% risk-free in government bonds, gold's zero-yield profile becomes a harder sell.
• Gold Has Shed Over 20% From Its January Peak. Gold is at $4,428.80 per ounce as of March 26, down from the $5,589 all-time high hit in January — a correction exceeding 20%. Analysts at ANZ note that gold's initial spike followed by sustained selling mirrors the Russia-Ukraine pattern, where "liquidity needs outweigh safe-haven demand" in the early stages of a shock.
• Wall Street Still Sees a Rebound — Eventually. Goldman Sachs is holding its year-end target at $5,400, citing structural central-bank buying, while J.P. Morgan predicts a climb to $6,000 if global dollar diversification continues. Analyst John Meyer argues "the bigger picture remains intact: ballooning G7 budget deficits, sticky inflation and central bank foreign reserve diversification." But near-term, GLD is hostage to headline risk: a confirmed ceasefire could drop oil $10–15 per barrel and revive gold, while escalation pushing Brent above $120 would deepen the yield-driven selloff .