Explained — Key factors why Gold surged after a nine-day losing streak

Gold prices in the spot market have extended their gains on Thursday, March 25, continuing their rebound, after having snapped a nine-day losing streak overnight.

The bullion prices traded near the $4,550 an ounce mark in Asia trading, having risen 1.5% in the previous session as well.

Bullion and other asset classes are reacting to multiple contradictory reports on the status of the US-Iran war, but the biggest reaction is coming from a New York Times report, which states that the US has sent Iran a 15-point plan to end the war.

This is in contradiction to a Wall Street Journal report which states that the US is also planning to deploy as many as 3,000 troops in the West Asia region, even as it seeks a diplomatic route to end the war, currently in its fourth week, and has roiled financial markets worldwide.

Gold prices sank as much as 15% this month after oil prices shot to four-year highs after the US and Israel attacked Iran at the start of the month, in response to which, Iran launched attacks across Gulf countries, causing damages to multiple energy-related infrastructure across Qatar, Saudi Arabia and the UAE, major oil and gas producing nations.

With oil prices surging to as high as $120, fears of inflation sent panic waves across risk assets, and dashed hopes of easier monetary policy from central banks through 2026 as well. For some central banks, including the European Central Bank and the Bank of England, traders have even priced in a minimum of two rate hikes. Remote possibilities of the US Federal Reserve also hiking interest rates this year have emerged.

Higher interest rates is a negative for gold as it does not yield any interest. The decline in stock markets also forced investors to liquidate some of their positions in Gold to shore up cash. The yellow metal had seen a sharp surge through 2025 and for the first few days of 2026 before the war began, surging to levels as high as $5,600 an ounce.

There have also been reports of central banks selling gold to defend currencies, including the Turkish Central Bank, which is said to have discussed the possibility of gold-for-foreign-currency swap transactions in the London market, Bloomberg reported citing people familiar with the matter.

Central Bank buying has been the key catalyst of the Gold bull run starting 2022, although the pace of buying had already slowed down this year.