Key Highlights
- Precious metals experienced significant losses, with spot gold declining 4.3% following President Trump’s primetime address on Middle East tensions
- The President announced plans to strike Iran with severe force within a two to three-week timeframe
- Silver experienced a steeper 7% decline, accompanied by losses in platinum and palladium
- Despite the downturn, UBS continues projecting gold will average $5,000 per ounce throughout 2026
- The investment bank recommends accumulating positions if prices retreat to the $4,000 threshold
Precious metals experienced a dramatic selloff Thursday following President Donald Trump’s evening speech that created uncertainty around escalating Middle East tensions rather than providing clarity.
Spot gold tumbled by as much as 4.3%, halting its four-session rally. By 2:12 p.m. Singapore time, the yellow metal was changing hands at $4,562.88 per ounce. Silver suffered an even steeper 7% loss, settling at $69.86. Both platinum and palladium registered declines as well.
During his address, Trump suggested the conflict was approaching its conclusion while simultaneously announcing plans to target Iran with overwhelming military force within the coming two to three weeks. The President claimed military objectives were nearly completed and called upon allies dependent on Middle Eastern crude to contribute toward resolving the virtual shutdown of the Strait of Hormuz.
The Strait of Hormuz previously facilitated the passage of approximately 20% of global oil and liquefied natural gas shipments. Anxiety surrounding potential disruptions to energy transportation through this critical waterway contributed to rising crude prices.
The US dollar index climbed 0.4% in the aftermath of the speech. Stock markets also retreated as investors scaled back risk exposure.
According to Christopher Wong, a strategist at Oversea-Chinese Banking Corp, Trump’s address “essentially portrayed the conflict through the lens of military achievement rather than peace negotiations.” Wong observed that gold had touched an intraday peak of $4,800 earlier, but suggested upward momentum might stall given apprehension about potential American ground forces entering Iran.
Gold had previously endured a challenging March. The precious metal plummeted nearly 12% during that period, marking its most severe monthly decline since October 2008. Elevated crude prices intensified inflation worries, diminishing prospects for monetary policy easing and pressuring gold valuations.
Prior to the presidential address, market participants had anticipated the Federal Reserve might implement rate reductions to bolster economic activity should the conflict become protracted. These expectations reversed following Trump’s hawkish messaging.
With markets preparing to close for the Good Friday observance, Wong noted that traders’ desire to minimize exposure before the extended weekend was also influencing price action.
UBS Maintains Optimistic Gold Outlook Despite Sharp Correction
Notwithstanding the pronounced decline, UBS continues to hold a constructive view on gold’s prospects. Strategist Joni Teves indicated in Thursday’s research note that the firm interprets the current weakness as an attractive entry point.
UBS made a modest adjustment to its 2026 gold projection, lowering it to $5,000 per ounce from $5,200, acknowledging the recent pullback from January’s record peak. The bank’s forecasts for 2027 remain unchanged at $4,800, with 2028 projections holding steady at $4,250.
Teves explained that speculative excess has been eliminated from the market and exchange-traded fund redemptions have remained moderate, creating space for investors to reestablish positions. Chinese gold ETFs have maintained positive inflows, while physical buying in domestic markets has demonstrated resilience.
The investment bank emphasized that any decline approaching the $4,000 mark should be considered an opportunity to accumulate holdings.
Silver Projections Reduced
UBS lowered its 2026 silver target to $91.9 per ounce from the previous $105 estimate. Teves highlighted that silver’s dual nature as an industrial commodity increases its vulnerability to deteriorating global economic conditions.
Spot silver was last quoted at $69.86 on Thursday.
