Created Date: March 18, 2026 08:24
While tensions in the Middle East continued, gold prices fell before the Fed’s interest rate decision. However, after the US Federal Reserve’s interest rate decision, gold prices almost melted. Yatirim Trader CEO Candaş Atalay explained why gold prices declined in a war environment for hurriyet.com.tr.
Before the Fed decision was announced, the ounce price of gold was at the level of 4891 dollars, decreasing by 2.2 percent compared to yesterday. After the decision, the ounce price of gold fell by 3.2 percent to 4844 dollars.
Gram gold found buyers at the level of 6954 TL, with a decrease of 2.2 percent. After the decision, gram gold decreased by 3.1 percent to 6892 TL.
The ounce price of silver is at $76.15, with a decrease of 4.04 percent.
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Gold prices fell before the Fed decision as the Iran-Israel-USA war continued. The murder of Ali Larijani, Iran’s most senior figure in charge of security, stood out as the factor that escalated the tension.
In addition, the fact that the Strait of Hormuz, through which 1/5 of the world’s oil shipments are carried out, remains largely closed due to tensions continues to keep energy prices high.
Oil prices above $100 increase transportation and production costs. It is feared that this situation will trigger global inflation.
At the beginning of the year, it was expected that the Fed would cut interest rates twice this year. In a low interest rate environment, investors turn to gold with the demand for a safe haven. However, the geopolitical tension in the Middle East created inflation fears, reducing investors’ hopes for a possible interest rate cut within the year.
The Fed announced its interest rate decision today after a two-day meeting. In this meeting, the Fed kept the interest rate constant at 3.50-3.75 percent.
WHY IS GOLD FALLING?
So why is gold falling as geopolitical tensions continue? The answer to this curious question was answered by Yatirim Trader CEO Candaş Atalay. Atalay said, “Israel killed Iran’s security chief, attacks are escalating in Southern Lebanon. The Russia-Ukraine fire is not going out. The Red Sea is not safe. The Strait of Hormuz is closed. Crude oil is above 100 dollars. This whole picture is a picture in which the gold price should skyrocket. But gold has fallen below 5,000 dollars.” he said.
“It’s not a paradox, it’s a calculation.” Atalay continued his statement as follows:
Rising oil prices increase the fear of inflation. Inflation fears are driving the Fed into a corner. At this stage, the possibility of an interest rate increase has outweighed geopolitical risks. Three weeks ago, the probability of the Fed cutting interest rates was 57 percent. Today it has fallen to 23 percent. In fact, an interest rate increase in the medium term is on the table. The expectation of a strong dollar and rising interest rates seems to have overcome the pressure put on the bottom by geopolitical fear for now. The market also prices this.
In the last two weeks, there has been an outflow of 37 tons from gold-backed investment funds. These funds, which have seen strong inflows since mid-January, have now reversed. Derivative trading volumes on Comex have fallen by 25 percent since the start of the Iran war. The loss in leveraged options transactions reached 40 percent. The Fed will speak today. The messages Powell will give are important. In particular, a FED that postpones the interest rate cut and expresses inflation concerns may open the door to a decline in gold prices up to $4800. For gram gold, levels below 7000 TL can be seen depending on the harshness of Powell’s messages.
“FALLS ARE NOT A DANGER”
“I think that for Turkish investors who follow gold, these price decreases are not a danger, but a discount.” Atalay concluded his words as follows:
I think that especially after the Iran war is left behind, the world’s desire to get rid of the dollar will be faster and any weakness in the dollar will seriously open the way for gold.
