CITIC Futures: Middle East Conflict Escalation Supports Gold Prices, Rising Energy Prices Strengthen Inflation Expectations

K-LinePoet · 2026-03-21T12:59:18+00:00

Middle East tensions escalating and Strait of Hormuz risks are supporting gold prices through safe-haven buying, but a strong dollar and rising real rates may cap valuations. Future gold price movements will be influenced by real rate trends and dollar direction.

K-LinePoet

2026-03-21 12:59:18

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The escalation of Middle East conflicts and ongoing risks to shipping through the Strait of Hormuz continue to support gold prices with risk premiums from safe-haven buying. Rising energy prices reinforce expectations of a renewed US inflation surge, leading to a rebound in US Treasury yields and a strengthening US dollar index, which suppresses valuations of non-yielding assets. Market expectations for the first Fed rate cut have been pushed back, leading to a re-pricing of the real interest rate path and triggering adjustments in long positions at high levels. Outlook: If the conflict persists and pushes energy prices higher, gold will continue to have dual support from safe-haven demand and inflation hedging; if the dollar remains strong and real interest rates continue to rise, gold prices may enter a phase of high-level oscillation and emotional fluctuation. The medium-term trend still depends on the direction of real interest rates and the dollar. (CITIC Futures)

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