The current fall in gold prices may seem illogical, but is actually easy to explain
24. 03. 2026Mgr. Ing. Filip Horáček, Ph.D., Sales Director
The conflict in Iran is pushing up oil and energy prices, creating inflationary pressures. Central banks are responding by raising interest rates. Higher rates increase the appeal of US bonds and strengthen the US dollar, which in the short term puts downward pressure on gold prices.
If this situation persists, however, the effect may reverse. Sustained high energy prices fuel inflation and, combined with elevated rates, could slow down the economy and lead to stagflation. This is typically associated with falling real returns and a gradual easing of monetary policy, which in turn benefits gold.
In simple terms:
- in the short run, a strong dollar exerts pressure;
- in the long term, inflation and geopolitical risks come into play.
If tensions persist, the current dip may prove to be an attractive buying opportunity.
This is also reflected in forecasts by major financial institutions. JP Morgan expects gold to climb to USD 6,300 by the end of 2026, while Bank of America has a target of USD 6,000, BNP Paribas USD 6,250, and Wells Fargo expects a range of USD 6,100–6,300.
