I just reviewed some quite interesting information about what happened with gold in March, and I believe there’s a detail many investors miss when analyzing this. Everyone expected gold to be the perfect safe haven when tensions in the Middle East intensified, but it turned out to be exactly the opposite.

The numbers are clear: gold reached nearly $5,600 in January, then plummeted almost 25% in March, touching $4,100. Most people thought it was a total contradiction, but there’s actually a logic behind it. When markets saw the conflict in the Middle East, they didn’t interpret it as an isolated geopolitical event but as the start of a serious inflation shock. This completely changed expectations.

What happened was that investors bet that central banks would keep interest rates high for longer. With U.S. Treasury yields rising and the dollar strengthening, people moved into more liquid assets like short-term bonds and dollars. Gold, on the other hand, became the asset to sell when they needed to lock in profits after the strong movements of 2025 and January 2026.

Additionally, it seems some central banks sold part of their gold reserves to support their local currencies and pay for energy imports. That intensified the downward pressure. A Freedom24 analyst explained it well: gold is not the perfect tool to hedge against oil shocks or sudden inflation. At the start of an energy crisis, oil and the dollar can dominate gold.

What’s interesting is that this doesn’t mean gold has lost its appeal as a safe haven. The March drop was more of a stress test, a reduction of speculative positions. When the scenario started to calm in April, with the agreement between the U.S. and Iran, oil fell below $100, and gold quickly rebounded to $4,800. Even during the most severe correction, China’s People’s Bank continued buying gold for the seventeenth consecutive month. That says a lot about long-term confidence in the metal.

Now, after that 20-25% drop, gold’s valuation looks much more reasonable than in January. It’s not cheap, but it’s not overvalued either. Risks still persist: geopolitical conflicts, high energy prices, stagflation risk, de-dollarization trends. Central banks are still aggressively buying. Many see the March sell-off as a market reset, not the end of the bullish trend.

Honestly, betting everything on an aggressive purchase now seems risky given the volatility. A gradual accumulation strategy makes more sense. If the Middle East heats up again, oil returns to $100, and fears of a slowdown grow, gold could test $5,200–$5,400. But if everything continues to calm down, it will probably stabilize in the $4,500–$5,000 range, supported by dollar weakness and rate cut expectations. Gold remains relevant, but timing needs to be strategic.