Key Takeaways
- Precious metals experienced a significant downturn, with spot gold declining 4.3% following President Trump’s Middle East policy speech
- The President announced plans to target Iran with force within the coming two to three weeks
- Silver experienced an even steeper decline of 7%, with platinum and palladium posting losses as well
- Despite the selloff, UBS analysts remain optimistic, projecting gold to average $5,000 per ounce throughout 2026
- The investment bank considers any retreat toward the $4,000 level as an attractive entry point for investors
Precious metals experienced a dramatic reversal on Thursday following President Donald Trump’s televised address concerning the escalating Middle East crisis, which created uncertainty across financial markets.
Spot gold tumbled by as much as 4.3%, halting its four-session rally. As of 2:12 p.m. Singapore time, the yellow metal was changing hands at $4,562.88 per ounce. Silver experienced an even more pronounced decline, falling 7% to $69.86. Both platinum and palladium posted losses as well.
During his address, Trump indicated the conflict was approaching its final stages, while simultaneously warning of imminent and forceful military action against Iran within the next two to three weeks. He claimed US military objectives were close to fulfillment and called upon allies dependent on Middle Eastern energy supplies to contribute to resolving the near-blockade of the Strait of Hormuz.
Prior to the current conflict, the Strait of Hormuz served as a critical passage for approximately 20% of global oil and liquefied natural gas shipments. Anxieties surrounding potential disruptions to energy transportation through this strategic waterway contributed to rising crude prices.
The US dollar index climbed 0.4% in the aftermath of the President’s remarks. Equity markets simultaneously declined as investors retreated from riskier assets.
According to Christopher Wong, a strategist with Oversea-Chinese Banking Corp, Trump’s address “essentially presented the situation as a military victory narrative rather than a peace initiative.” He observed that gold had reached an intraday peak of $4,800 earlier in the session, but suggested upward momentum might stall given anxieties about a potential US ground invasion of Iran.
Gold has faced headwinds throughout March. The precious metal suffered an approximately 12% decline during the month, marking its most severe monthly loss since October 2008. Elevated oil prices sparked inflation worries, diminishing prospects for interest rate reductions and creating downward pressure on gold valuations.
Prior to the speech, market participants had anticipated the Federal Reserve might implement rate cuts to bolster economic activity if the conflict became protracted. That sentiment shifted following the hawkish tone of Trump’s message.
With financial markets preparing to close for the Good Friday observance, Wong suggested that risk reduction ahead of the extended weekend was also influencing trading behavior.
UBS Maintains Optimistic Stance Despite Recent Decline
Despite Thursday’s sharp retreat, UBS continues to express confidence in gold’s long-term prospects. Strategist Joni Teves stated in a Thursday research note that the firm interprets the current pullback as a favorable accumulation opportunity.
UBS made a modest adjustment to its 2026 gold projection, lowering it to $5,000 per ounce from $5,200, acknowledging the recent price correction from January’s record peak. The bank’s forecasts for 2027 and 2028 remain unchanged at $4,800 and $4,250, respectively.
Teves highlighted that speculative excess has been eliminated and outflows from exchange-traded funds have been limited, creating space for investors to reestablish positions. Chinese gold ETFs have maintained positive net inflows, while domestic physical demand has demonstrated resilience.
UBS indicated that any price decline approaching the $4,000 threshold should be interpreted as an opportunity to increase holdings.
Silver Price Target Adjusted Lower
UBS reduced its 2026 silver projection to $91.9 per ounce from $105. Teves explained that silver’s dual nature as an industrial commodity increases its vulnerability to potential deceleration in global economic activity.
Spot silver was trading at $69.86 on Thursday afternoon.
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