Gold price forecast: Safe-haven fails as oil shock drives 43-year drop

Gold price forecast turns negative as gold sells off sharply amid the US–Iran oil crisis. During March 16–20, gold plunged about 11% in its biggest weekly drop since 1983, falling to roughly $4,488 per ounce. The move wiped out more than $2 trillion in market value within days and follows a broader slide: since late February, when strikes on Iran began, gold is down over 15% from around $5,500. The article argues the classic “safe-haven” bid is weakening. Disruptions in the Strait of Hormuz raise energy-crisis concerns, pushing oil higher and lifting inflation expectations. That strengthens the case for the Federal Reserve to keep interest rates elevated. Higher rates hurt gold because it provides no yield, increasing demand for bonds and income assets. Fed Chair Jerome Powell has warned inflation could stay elevated due to energy pressures. Although President Trump floated the idea of scaling back military efforts, US troop deployments and airstrikes continue, keeping geopolitical signals mixed. While gold struggles, Bitcoin shows improving relative strength. Over 12 months, gold is still up about 48.5%, but Bitcoin is down around 16.5%. In the short term, since late February, Bitcoin has gained more than 11.6%, trading near $70,535, while gold has declined more than 15%. This divergence suggests market leadership may shift as investors reassess what qualifies as a safe haven in a high-rate, oil-driven inflation backdrop—similar to the early-1980s episode under Paul Volcker when aggressive hikes crushed gold.