Gold rate drops 4% in March despite US–Iran war, increased inflationary risks— Could an end to war trigger a major fall?

The unexpected drop in gold prices, despite geopolitical tensions, challenges the traditional safe-haven narrative for precious metals. This could signal a shift in global commodity cycles and investor sentiment, impacting Indian companies with exposure to gold.

• •US Gold Futures have shed more than 4% in March so far.
• •Domestic spot gold prices (MCX data) have declined by more than ₹3,000, or 2%, per 10 grams this month.
• •The decline occurred despite a US-Iran war and increased inflationary risks.
• •Risk flag: Sudden escalation of geopolitical conflicts could reverse gold's trend.
• •Risk flag: Unexpected dovish shifts by central banks could boost gold's appeal.