Gold Plunges Over 4% as Trump’s Iran Remarks Spark Major Market Reversal

TLDR

• Precious metals reversed course as spot gold declined 4.3% following Trump’s Middle East policy announcement
• The President warned of intense military action against Iran within two to three weeks
• Silver experienced a sharper 7% decline, with platinum and palladium following suit
• UBS reaffirmed its positive gold stance, projecting $5,000 per ounce average for 2026
• The investment bank sees potential dips to $4,000 as strategic entry points

Precious metals experienced a significant downturn Thursday following President Donald Trump’s evening address that created fresh uncertainty regarding the escalating Middle East situation.

The yellow metal plummeted by as much as 4.3%, halting its four-session rally. By 2:12 p.m. Singapore time, spot gold was changing hands at $4,562.88 per ounce. Meanwhile, silver suffered a steeper 7% decline to $69.86. Both platinum and palladium registered losses as well.

In his address, Trump suggested the conflict was approaching its conclusion while simultaneously threatening to hit Iran “extremely hard” within the coming two to three weeks. The President claimed military objectives were close to completion and called on allies dependent on Middle Eastern energy supplies to assist in addressing the near-blockade of the Strait of Hormuz.

Prior to the conflict, the Strait of Hormuz served as a critical passage for approximately one-fifth of global oil and liquefied natural gas shipments. Anxieties surrounding energy transportation through this strategic waterway contributed to rising crude prices.

The greenback strengthened, with the US dollar index climbing 0.4% after Trump’s remarks. Stock markets also retreated as investor risk tolerance diminished.

Gold had already endured a challenging March. The precious metal plunged almost 12% during that period, marking its worst monthly showing since October 2008. Elevated crude prices sparked inflation worries, which diminished prospects for interest rate reductions and pressured gold values.

Prior to Trump’s speech, market participants had anticipated the Federal Reserve might lower rates to bolster economic activity if the conflict continued. That sentiment changed following the President’s aggressive stance.

With trading paused for the Good Friday holiday, Wong noted that investors’ desire to minimize exposure before the extended weekend also played a role in market movements.

UBS Maintains Optimistic Gold Perspective

Despite Thursday’s selloff, UBS is holding firm on its constructive gold outlook. Strategist Joni Teves stated in a Thursday research note that the firm interprets the price decline as an attractive buying opportunity.

UBS made a modest adjustment to its 2026 gold projection, lowering it to $5,000 per ounce from $5,200, acknowledging the recent retreat from January’s record peak. The firm’s 2027 outlook remains unchanged at $4,800, with 2028 at $4,250.

Teves explained that speculative positions have been unwound and exchange-traded fund redemptions have been limited, creating space for investors to reestablish holdings. Chinese gold ETFs continue registering net positive flows, while domestic physical buying remains robust.

According to UBS, any price correction approaching the $4,000 threshold should be considered an opportunity to accumulate positions.

Silver Projections Adjusted Lower

UBS reduced its 2026 silver target to $91.9 per ounce from $105. Teves highlighted that silver’s industrial applications make it more vulnerable to any deceleration in worldwide economic expansion.

Spot silver was last quoted at $69.86 on Thursday.

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