Gold has its worst month since 2008 recession why the Iran war is hitting metals

Gold is on track for its worst monthly decline since 2008 as a historic energy supply shock amid the Iran war spooks investors who were hoping for interest-rate cuts.Spot prices are poised for a drop of 14.6% in March – the largest monthly fall since October 2008, when gold plummeted 16.8% during the Great Recession.Gold futures had jumped 2.7% to settle at $4,647.60 an ounce Tuesday, while the Dow Jones Industrial Average rose more than 1,100 points, or 2.5%, on news President Trump believes the Iran war is likely to end soon.Futures ended the month down 11%, or $582.90 — the largest one month dollar decline on record.Still, investors are concerned that a boost in inflation could delay interest-rate cuts – a hit to gold, which performs better alongside lower interest rates.While heightened geopolitical anxiety typically helps gold’s performance, the conflict has reheated fears of inflation as the Strait of Hormuz crisis pushes oil prices well above $100 a barrel – sending gasoline to $4 a gallon on Tuesday, the highest level since 2022.“For so long as the dollar continues to strengthen, the Iran war remains localized and is perceived as having a fairly short duration, and interest rates remain comparatively high, gold will remain weak,” Kenin Spivak, chairman and CEO of SMI Group, told The Post.Markets were largely expecting two interest-rate cuts in 2026 before the US and Israel began strikes on Iran on Feb.

28.Now the Fed’s dot-plot shows just one rate cut this year.As recently as last Friday, traders were pricing more than 50% odds of a rate hike this year – though those odds plummeted after Fed Chair Jerome Powell said there is no need for a hike.“It is not a trend reversal, it is a reset in positioning that has created the most compelling accumulation opportunity since late 2023,” Tracy Shuchart, senior economist at NinjaTrader, said of declines in gold.“What left the market was the leveraged speculative money, the tourists chasing mo...