Gate News, March 25 — Driven by a significant decline in oil prices and expectations of easing tensions in the Middle East, gold prices rebounded. Spot gold rose approximately 2.56% to $4,588 per ounce, while April-delivered gold futures increased over 4%, closing at $4,597.7.
U.S. President Donald Trump stated that the U.S. and Iran are “engaged in negotiations” and hinted at the possibility of reaching an agreement. As a result, market risk sentiment improved, and international oil prices quickly retreated. Brent crude futures fell about 6% to $98.31 per barrel, and U.S. WTI crude futures dropped around 5% to $87.65. Meanwhile, the U.S. dollar index weakened slightly in early Asian trading.
Analysts believe that the decline in oil prices alleviates concerns over imported inflation, providing support for gold. However, over a longer-term horizon, gold prices are still about 17% below their late January highs. Goldman Sachs noted that this correction aligns with historical trends, mainly driven by rising interest rate expectations and increased market volatility.
Daan Struyven, Co-Head of Goldman Sachs’ Global Commodities Research, said that rising interest rates have suppressed demand for rate-sensitive assets like gold ETFs. Additionally, during periods of tight market liquidity, some investors are forced to reduce holdings of gold and other assets to meet margin calls.
Despite short-term fluctuations, Goldman Sachs maintains a bullish outlook on gold in the medium to long term, expecting prices to reach $5,400 per ounce by the end of 2026. The rationale is that central banks worldwide continue to increase gold holdings to diversify risk and reduce exposure to geopolitical and financial system uncertainties.
Market participants point out that current oil prices, interest rate expectations, and geopolitical tensions are collectively shaping gold’s trajectory. The demand for safe-haven assets will continue to depend on macroeconomic developments and policy evolution. (CNBC)
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