FX.co ★ Gold Tops $4,570 but Heads for Worst Monthly Drop Since 2008

Gold climbed above $4,570 per ounce on Tuesday, rebounding from lower levels, yet remained on track for its largest monthly decline in more than 17 years. The metal has dropped over 13% in March—its sharpest monthly fall since October 2008—and now trades nearly 19% below the record highs reached in late January. This steep selloff underscores a dramatic shift in investor sentiment: the escalating war in the Middle East has stoked inflation fears and led markets to anticipate a more hawkish monetary policy stance. With Iran effectively blocking the Strait of Hormuz, the conflict has pushed oil prices higher, reinforcing expectations of tighter policy. Traders have now fully priced out any prospect of US rate cuts in 2026—a striking reversal from pre-war forecasts that penciled in two cuts—even as Fed Chair Jerome Powell maintains that long-term inflation expectations remain anchored. In this environment, investors have flocked to the US dollar as their preferred safe haven, putting sustained downward pressure on gold.