Gold silver prices moved sharply lower in early Thursday trading (ET), even as Federal Reserve Chair Jerome Powell explicitly warned that an oil supply shock tied to the Iran war could push inflation higher and weaken spending and employment. The contradiction—geopolitical risk on one side, falling precious metals on the other—has become the story traders are now forced to confront.
What happened to Gold Silver Prices after the Fed decision?
In the first clear market signal following the Federal Reserve’s March policy meeting, gold April futures opened Thursday at $4, 828 per troy ounce, down 1. 4% from Wednesday’s closing price of $4, 896. 20. In early trading, the gold price fell below $4, 700.
The Fed concluded its March policymaking meeting on Wednesday and left interest rates unchanged. The Fed’s latest Summary of Economic Projections showed a median forecast of one rate reduction in 2026, unchanged from the December Summary of Economic Projections.
The market mechanism in play is straightforward and has been repeatedly emphasized by policymakers and market education materials: gold does not pay interest, and its price responds negatively to high borrowing costs. With rates held steady, the “carry” disadvantage for holding gold remains in place, and Thursday’s early price action reflected that pressure.
If inflation fears are rising, why aren’t metals rising?
Powell put the inflation risk in unusually direct terms: he confirmed that the oil supply shock caused by the Iran war could prompt higher inflation and, potentially, lower spending and employment. He also noted the tension policymakers face between elevated inflation risk and a weak labor market—an environment where the central bank’s usual toolkit points in conflicting directions.
That policy tension matters for precious metals because it frames what traders think comes next. Typically, the Fed raises interest rates to combat inflation and lowers rates to stimulate jobs and spending. On Wednesday, rates were left unchanged, and the 2026 median forecast remained for one rate reduction—no acceleration in expected easing was presented in the Fed’s projections as described in the Summary of Economic Projections.
Verified fact: Gold’s response to borrowing costs is negative in the framework laid out in the market commentary accompanying Thursday’s price move. Informed analysis: The same framework implies that even when inflation risks are discussed openly, gold can still fall if investors interpret the policy path as “higher for longer” or insufficiently supportive for non-yielding assets.
What the latest price drop reveals about the “safe haven” narrative
The sharp early slide—down 1. 4% at the open and then below $4, 700—landed alongside another notable data point: gold’s one-year gain “hasn’t been this low since early February, ” after gold’s year-over-year growth was 95. 6% on Jan. 29. Those statements describe a narrowing of longer-term momentum even before Thursday’s selling intensified.
Verified fact: the Fed’s stance, as summarized in the projections, did not shift the median forecast for 2026 rate reductions from what it was in December. Verified fact: Powell described a pathway where an oil supply shock linked to the Iran war could raise inflation while also weakening spending and employment.
Informed analysis: When these facts are read together, the immediate implication for Gold Silver Prices is uncomfortable for the popular “crisis hedge” storyline. Geopolitical strain and inflation risk do not automatically translate into higher precious-metals prices when the market is also focused on borrowing costs and the direction of monetary policy expectations.
What remains undisclosed in the available record is how market participants are weighing the two competing forces Powell highlighted—elevated inflation risk versus a weak labor market—against the persistent reality that gold does not pay interest. The resulting price action suggests that, at least in early Thursday trading (ET), the cost-of-carry narrative is dominating.
