On March 3, the precious metals market experienced sharp volatility, with prices falling rapidly and exhibiting significantly amplified price swings.
In the spot market, as of the latest update, spot gold in London fell by 0.46% to $5,296.925 per ounce, after hitting an intraday low of $5,278.598. Spot silver in London saw a steeper decline, dropping 4.15% during the day to $85.559 per ounce, with a low of $82.957.
Futures markets also faced pressure, showing notable fluctuations. COMEX gold futures edged up 0.11% to $5,317.3 per ounce, after touching an intraday low of $5,292.1. COMEX silver futures fell 3.45% to $85.785 per ounce, reaching a low of $83.005.
The sudden drop in precious metals prices was not driven by a single factor. According to analysis, the movement resulted from a combination of three influences. First, market expectations regarding the Iran situation stabilized following precise U.S.-Israel strikes, leading to a rapid retreat in safe-haven sentiment that had previously been priced into precious metals. Second, after gold prices had already factored in the potential risk of a "full-scale war," some institutions opted to take profits as events unfolded, intensifying the price correction. Third, a sharp surge in crude oil prices attracted large capital inflows into the energy sector, diverting funds that had been allocated to gold and other precious metals, further pressuring their prices.
Market experts noted that volatility in precious metals had subsided after a rebound, but renewed tensions in the Middle East triggered sharp fluctuations, which are considered a normal reaction. Silver's larger decline compared to gold aligns with its higher volatility characteristics. Over the long term, against the backdrop of high U.S. debt, a weakening dollar, and deteriorating geopolitical conditions, the core role of precious metals as a global monetary anchor remains unchanged, with solid fundamental support suggesting further upside potential.
Looking ahead, in the short term, the duration of the current Middle East conflict, subsequent geopolitical developments, and progress in international mediation will directly influence the direction of gold and other precious metals prices next week, with U.S.-Iran geopolitical risks remaining a key variable.
Over the medium to long term, persistent global geopolitical uncertainty, weakening confidence in major economies' fiat currencies, continued gold reserve accumulation by central banks, and rising demand for metal raw materials from global AI computing and data center construction collectively support a favorable outlook for precious metals. Price targets suggest international gold and silver prices may again test previous highs from January, challenging levels around $5,600 per ounce for gold and $120 per ounce for silver.
Short-term price movements may continue to fluctuate within a range, with direction depending on the intensity of Iran's subsequent responses. In the medium term, if high oil prices drive inflation and delay Federal Reserve interest rate cuts, gold prices could face pressure. Long-term upward trends are expected to remain intact, supported by central bank gold purchases, de-dollarization trends, and the normalization of geopolitical conflicts.
