30. April 2026
The performance of the gold price in March surprised many investors, as the precious metal recorded significant price declines despite geopolitical escalations. According to Imaru Casanova, portfolio manager at VanEck, such seemingly counterintuitive behavior in times of crisis is not unusual. Similar patterns of initial price slumps triggered by liquidity needs, rising interest rates and a strong US dollar were already observed at the start of the 2008 financial crisis, at the outbreak of the pandemic in 2020, and after Russia’s invasion of Ukraine in 2022. At that time, oil prices above $100 per barrel led to higher interest rates and a strong dollar, after which gold fell by around 18% following a brief rally.
The first quarter of this year was also marked by massive volatility. After gold reached an all-time high of $5,595 per ounce on January 29, prices initially slipped back below the $5,000 mark in February. A conflict between the US, Israel and Iran led to a brief price increase to above $5,400 in early March, with the monthly high of $5,418 recorded on March 2. This was followed by a sharp sell-off. On March 23, the gold price fell by $1,319 to a monthly low of $4,099 and ultimately ended the month at $4,668.06. This corresponds to a monthly loss of $611, or 11.6%. Despite this setback, at month-end gold was still $349, or 8.0%, above its level at the start of the year.
High oil prices and inflation concerns weigh on gold
Most recently, the precious metal was weighed down by higher oil prices, which fueled inflation concerns and subsequently led to rising interest rates and a more restrictive outlook from the Federal Reserve. At the same time, investors used the high price level to take profits, which was reflected in strong outflows from gold bullion ETFs to raise liquidity. Central bank activity was also subject to fluctuations. While Turkey sold gold in March to support its own currency, the World Gold Council reported continued purchases by countries such as Indonesia, Guatemala and Malaysia. The long-term trend toward diversifying currency reserves away from the US dollar therefore remains intact.
Gold mining stocks were not spared by the recent price action. The MarketVector Global Gold Miners Index (MVGDXTR) fell by 21.4% in March, but is still up 5.3% year to date. Imaru Casanova emphasizes that miners’ fundamentals remain extremely solid at prices around $4,000. The companies would continue to generate high margins that support growth investments, share buybacks and dividends. According to Scotiabank calculations, average all-in sustaining costs (AISC) are $1,867 per ounce. Even total costs, which include taxes, interest and exploration spending, among other items, are estimated by the bank at a moderate $3,525 per ounce.
This high profitability enables mining companies to step up investment in the future again. According to S&P Global, exploration spending at mine sites reached a record high in 2025 and rose by 45%, while total exploration budgets increased by 11%. Even the risk of rising oil prices is manageable for miners. Fuel accounts for around 7% of AISC, and a doubling of the oil price could increase costs by 10% to 20% without hedging. In practice, however, companies hedge these risks. One example is Kinross Gold Corp., which as of March 31, 2026 accounted for 4.31% of the strategy’s net assets. Taking hedges into account, Kinross shows a sensitivity of only around $3 per ounce for each $10-per-barrel change in the oil price.
Imaru Casanova concludes that the long-term outlook for gold remains intact. Once the current conflict subsides and volatility eases, the structural drivers—such as high US deficits, global de-dollarization and potential risks to economic growth—will come back into focus and continue to support the precious metal, she believes.
Source：https://goldinvest.de/en/gold-price-corrects-sharply-but-analysts-still-see-major-opportunities/
