Gold prices experienced their worst weekly decline since 1983, falling 11% amid Middle East tensions, while Bitcoin has rallied over 11% since the start of the conflict. The precious metal dropped to $4,488 per ounce, erasing gains from a late-January rally. Market uncertainty has been driven by geopolitical instability and shifting expectations for U.S. monetary policy.
Gold tumbled another 3.5% to $4,488 per ounce, marking an 11% weekly loss. This represents the largest weekly decline for the precious metal since 1983 as geopolitical instability weighs on markets.
The metal has fallen more than 15% since February 28, when the U.S. and Israel first attacked Iran. This erased part of a rally that pushed its price near $5,500 in late January.
TradingView confirmed March 16-20 was gold’s worst-performing week since 1983. The drop was slightly larger than one in late January that saw over $2 trillion shaved from its market cap.
The conflict is also disrupting global oil flows through the Strait of Hormuz. This has caused fears of a prolonged energy crisis.
U.S. President Donald Trump said he is considering “winding down” military efforts in the region. However, the U.S. has sent thousands of additional troops as airstrikes continue.
Traders anticipate the U.S. Federal Reserve will hold interest rates steady this year. This makes bonds and other yield-bearing investments more appealing than gold.
Federal Reserve Chair Jerome Powell noted higher energy prices would push up inflation short-term. His statement was made on Wednesday.
Gold has outperformed Bitcoin over the past 12 months, increasing 48.5%. Bitcoin has retraced 16.5% over the same timeframe.
Bitcoin has responded better to the Iran conflict, however, rising over 11.6% to $70,535. This rise occurred since the initial attack on Iran.
