Iran has initiated the 75th round of its "True Promise-4" military operation. According to reports, in the early hours of the 23rd local time, the Islamic Revolutionary Guard Corps issued a statement confirming the attack on newly identified Israeli military sites and the US's Prince Sultan Air Base in Saudi Arabia.
The standoff in the Strait of Hormuz has intensified. The United States has given Iran a 48-hour ultimatum to open the Strait, threatening to strike Iranian power plants if demands are not met. Iran responded defiantly, warning it would completely close the Strait of Hormuz if attacked. Concurrently, Israeli forces bombed several bridges in Lebanon, announcing a "deepening" of ground operations. As US-Israeli strikes expand their targets, regional tensions risk escalating further out of control.
The Israeli military reported striking multiple Iranian military facilities and command centers. According to a statement on the afternoon of March 22 local time, Israeli fighter jets targeted a training base, a weapons production and storage facility under the Ministry of Defense, an Islamic Revolutionary Guard Corps Air Force weapons production facility, a command center belonging to the Ministry of Intelligence, and a command center at the Iranian armed forces' Khatam al-Anbiya central headquarters. Dozens of munitions were dropped on these locations, described as part of an effort to "deepen the damage to the core systems and foundations of the Iranian regime."
Lebanon's Hezbollah claimed responsibility for firing rockets into northern Israel, stating they struck the Meron Air Traffic Control Base. The group also announced that its fighters used drones to attack a barracks in Ramot Naftali in Upper Galilee and launched another series of rockets later that evening. An Israeli Defense Forces spokesperson stated that Israel expects the conflict with Iran and Hezbollah to continue for several more weeks.
Iran's Foreign Ministry issued a statement concerning maritime security in the Persian Gulf and the Strait of Hormuz, asserting that Iran has long been committed to safeguarding shipping safety in these areas. It stated that military strikes by the US and Israel since February 28 have created a dangerous situation, directly impacting navigation and shipping security. The statement clarified that the Strait of Hormuz remains open for maritime traffic, but vessels and equipment belonging to the US, Israel, or other parties involved in military actions against Iran are considered to be engaging in "harmful passage" and will be dealt with accordingly. Vessels from other countries and regions can pass safely if they do not participate in or support aggression against Iran, comply with announced safety regulations, and coordinate with relevant Iranian authorities.
In a social media post, the Speaker of Iran's Parliament, Mohammad Bagher Ghalibaf, stated that, in addition to US military bases, financial institutions providing funding for US military expenses are also considered "legitimate targets" for Iran. He mentioned that Iran is monitoring the flow of related financial assets and called this a "final warning."
Iran's President responded to US threats via social media, stating, "Attempts to 'wipe Iran off the map' are a desperate trampling of the will of a nation that has made history. Threats and intimidation will only strengthen Iran's unity. The Strait of Hormuz is open to all, except those who violate Iran's territory. Iran will resolutely confront these mad threats on the battlefield." This was in response to a post by US President Donald Trump claiming, "The US has completely wiped Iran off the map."
The Iranian armed forces issued a statement warning that if President Trump's threat to attack Iranian power stations is carried out, Iran will immediately implement four "punitive" measures, including the complete closure of the Strait of Hormuz.
The US Department of State issued a global alert advising US citizens worldwide, particularly those in the Middle East, to exercise increased caution. The warning stated that US citizens abroad should follow security guidance from the nearest US embassy or consulate, as periodic airspace closures may disrupt travel. It noted that US diplomatic facilities, including those outside the Middle East, have become targets, and groups supporting Iran may attack other US interests or locations associated with the US and its citizens globally.
In early market movements, Brent crude oil opened higher, rising nearly 2%, but quickly retreated. At the time of writing, it was up 0.09% at $106.498 per barrel. New York gold opened nearly 3% lower before recovering somewhat; it was last down 2.48% at $4,495.432 per ounce. New York silver opened over 4% lower and then rebounded quickly; it was last down 2.52% at $67.906 per ounce.
Analysts suggest that gold may have further short-term downside. Last Friday, international gold prices fell sharply, with the spot price of London gold breaking below $4,500 per ounce and logging a weekly decline of over 10%. The core driver behind this drop was the Federal Reserve's March policy meeting, where officials held rates steady for the second consecutive time. The dot plot maintained the projection for only one rate cut in 2026, while significantly raising the 2024 inflation forecast to 2.7%, sending a clear hawkish signal. Escalating Middle East conflicts pushed oil prices above $107 per barrel, intensifying inflationary pressures and rapidly cooling market expectations for Fed rate cuts.
Analysts widely agree that the hawkish signal from the Fed was the primary catalyst for the sharp decline, with an extreme mismatch between market expectations and the Fed's stance amplifying the impact. Duan Endian, a precious metals researcher at Dayou Futures, explained that the Fed's policy stance affects gold prices through the mechanism of real interest rates and carrying costs. A hawkish signal keeps nominal rates high or pushes them higher. If rising oil prices have not yet fully fed through to end goods, this can increase real interest rates, directly raising the opportunity cost of holding gold, a zero-yield asset. Furthermore, hawkish sentiment typically strengthens the US dollar and Treasury yields, prompting capital to flow from gold to interest-bearing assets, creating a negative feedback loop of a strong dollar and weak gold.
Duan further analyzed that the significant impact of the Fed's steady policy stemmed from an extreme expectations gap and a sudden tightening of liquidity. The market had previously priced in multiple 2026 rate cuts, but the dot plot indicated only one cut for the year, with Chair Powell emphasizing a very high bar for easing. This unexpectedly hawkish tone reversed market expectations for looser policy, causing liquidity to tighten quickly and the Treasury yield curve to steepen, forcing leveraged funds to reduce risk exposure. Simultaneously, tighter US dollar liquidity increased margin requirements and financing costs for gold futures, triggering forced liquidations by long positions and leading to a rapid price decline in the absence of buying support.
Wei Chuntao, a precious metals analyst at Chuanyuan Futures, provided a broader perspective on the gold price decline. He noted that last week's drop in precious metals had both surface and underlying causes. Beyond the Fed meeting, a key factor was a shift in prior trading direction. The Fed was the first to pause, followed by the European Central Bank and the Bank of England, significantly dampening expectations for monetary easing and accelerating the market decline.
Wei added insights from a trading perspective: first, last year's long positions caught short sellers off guard, with physical deliveries creating pressure; second, following the 2026 fiscal year-end, persistently high premiums on gold futures made arbitrage profitable, gradually shifting momentum in favor of shorts; third, the bullish impact of Middle East geopolitical tensions had already been priced in, leading to a "buy the rumor, sell the fact" scenario. Additionally, a technical correction was overdue.
A notable anomaly in this gold price decline was its divergence from rising oil prices, contrary to traditional safe-haven logic where both might rise amid conflict. Both analysts offered explanations. Duan Endian suggested that the divergence, with oil rising and gold falling, typically occurs in the early stages of stagflation or during a strong monetary tightening cycle. The core mechanism is that the pace of increase in real interest rates outweighs the rise in inflation expectations. Historically, geopolitical conflicts or supply shocks driving up oil prices spark inflation concerns, which in turn pressure central banks toward tighter policy. This initially pushes up nominal rates. If long-term inflation expectations remain contained, the increase in nominal rates can exceed that in inflation expectations, resulting in higher real rates. Since gold's carrying cost is negatively correlated with real rates, even if safe-haven demand exists, capital may flow to higher-yielding US dollar assets when real rates rise rapidly due to policy tightening, pressuring gold prices.
Duan further stated that rising oil prices do reinforce the Fed's hawkish stance and elevate real rates, increasing the carrying cost and suppressing gold prices—a financial attribute that dominates in the early phase of liquidity tightening. However, given the normalization of geopolitical conflicts and the ongoing restructuring of the global credit system, safe-haven demand remains a theme of the era, and gold remains a scarce safe-haven asset.
Wei Chuntao commented that divergence between gold and oil prices is normal, as each has its own fundamental drivers. For oil, beyond Middle East tensions, several countries and international organizations have begun selling strategic petroleum reserves, mirroring a dynamic seen in last year's precious metals market. He noted that whether gold's pricing logic is shifting from a "safe-haven asset" to a "rate-sensitive asset" in the short term remains to be seen and requires monitoring.
Regarding whether gold has further downside in the short term, both analysts shared their views. Duan Endian believes there is some room for decline, but this is more likely a short-term correction rather than the start of a sustained downtrend. From technical and capital flow perspectives, the market is currently repricing the expectation of the Fed maintaining higher rates for longer. Rising US Treasury yields and a strong US dollar exert direct downward pressure, potentially testing key support levels again. However, he views the downside as limited. Ongoing geopolitical tensions provide solid support; any sharp decline driven by rate factors could quickly attract strategic buying, creating a floor. Therefore, short-term gold prices are likely to oscillate within a wide range with a clear ceiling and floor. The extent of the decline depends on how high real rates climb, while support stems from era-defining safe-haven demand and the logic of monetary credibility restructuring.
Wei Chuntao emphasized that judging the upside or downside potential and targets for oil and precious metals prices depends critically on market participant expectations, capital willingness, and changes in the futures-spot structure.