Gold and Silver Sell-off Deepens Amid Inflation Fears and Conflict
By John Nada·Mar 20, 2026·4 min read
Gold and silver face significant sell-offs as inflation fears and the Iran conflict grip markets. Central banks are closely monitoring these developments.
Gold and silver joined a broad sell-off on Thursday, with the metals shedding around 5% and 10%, respectively, as fears about the Iran war and inflation gripped global markets. Spot gold slid more than 3% to $4,654.29 an ounce. Front-month gold futures were down around 5% at about $4,648.20. Mining stocks and exchange-traded funds linked to gold and silver also fell in premarket trading.
The ProShares Ultra Silver ETF shed 20% ahead of Thursday's opening bell, while the iShares Silver Trust ETF — which was at the center of a so-called meme trade earlier this year — was down 4.4%. Aberdeen's Physical Silver Shares ETF also slid more than 4%. Teck Resources fell over 3%, with First Majestic Silver and Coeur Mining dropping more than 6% and 5%, respectively. The sell-off extended to European markets, where the Stoxx Europe Basic Resources index fell 6%.
Shares of major mining companies, including Fresnillo, the world's leading silver producer and a significant gold producer, were down 9.3%. Antofagasta, another mining giant, saw its shares decline by 8.2%. The moves in gold and silver come amid a broader risk-off sentiment, which has seen global equities and government bonds fall in tandem. European stocks moved sharply lower in early trade, while futures pricing also pointed to U.S.
equity markets falling at the open. Investors are closely monitoring the ongoing U.S.-Iran conflict as it heads toward its third week. The war is fueling concerns about an energy shock that could add inflationary pressure to economies across the globe. Oil and gas prices spiked on Tuesday after energy facilities in Iran and Qatar were hit by strikes, exacerbating fears of rising costs for many commodities.
These developments have led to an environment of heightened uncertainty, with many investors seeking to reassess their strategies in light of potential economic fallout. Central banks are also watching these developments closely. The U.S. Federal Reserve held rates steady on Wednesday, citing "uncertain" impacts arising from the conflict.
The Bank of Japan also kept interest rates steady, noting that inflation risks are now tilted to the upside due to the Iran war. A series of central banks in Europe, including those of the U.K. and the euro zone, are due to update their respective monetary policies later Thursday. Switzerland's central bank flagged the war in Iran as it announced its decision to hold its key policy rate at 0%.
The Swiss National Bank indicated a willingness to intervene in the foreign exchange market as the conflict drags on, highlighting the interconnectedness of geopolitical issues and monetary policy. Gold and silver both enjoyed record-smashing rallies in 2025, surging 66% and 135%, respectively, over the course of the year. However, they have seen much more volatile trade in 2026. Silver futures notably suffered their biggest single-day blow since the 1980s at the end of January.
This volatility highlights a significant shift in market dynamics, and according to Paul Surguy, managing director and head of investment management and proposition at Kingswood Group, the broader backdrop may be encouraging investors to rethink their holdings of these metals. He noted, "Global markets have seen broad selloffs as investors search for the quickest assets to sell; perhaps we are now seeing the next leg of this phase where the perceived safe haven assets are sold to fund purchases of those that may have overreacted to the current situation." Additionally, the physical nature of gold, which requires possession for true safety, is an added concern in this climate. With airspace and shipping lanes closed, the transmission of gold is becoming more expensive, or even impossible in some cases. This reality is worth noting as investors weigh the value of holding an asset that is traditionally seen as a safe haven during times of uncertainty.
Iain Barnes, CIO at British wealth management firm Netwealth, emphasized that the increased volatility in gold prices reflects its growing status as a financial asset across investment portfolios. He stated, "Financial, rather than fundamental investors are the marginal buyers of gold, and we see them reducing risk across the board." This trend is especially pronounced among fast-moving, leveraged funds that are particularly affected by rising borrowing costs. As these funds reassess their positions, it may lead to further fluctuations in the gold and silver markets. Dan Coatsworth, head of markets at AJ Bell, observed that the recent decline in gold prices suggests investors might be either liquidating assets that previously served them well or responding to a stronger U.S.
dollar. He commented, "Gold often declines when the U.S. dollar appreciates, as the metal becomes more expensive for buyers of other currencies." As the geopolitical tensions continue and inflation worries escalate, the implications for the precious metals market could be significant, reflecting broader economic sentiments and investor behaviors.