Gold prices plunged sharply as the Middle East conflict entered its fourth week, with the United States and Iran exchanging threats of new attacks. The precious metal fell as much as 3.8%, approaching $4,320.30 per ounce, bringing it close to its closing level from the end of last year. Since the outbreak of hostilities, surging oil prices have heightened inflation risks and reduced the likelihood of near-term interest rate cuts by the Federal Reserve and other central banks. This creates a headwind for non-yielding gold, which has declined for eight consecutive trading days and just recorded its largest weekly drop since 1983. Gold opened with volatile trading, mirroring broader market movements. Crude oil prices retreated after a brief, modest gain, while stock markets also experienced significant swings. Over the three weeks since the conflict began on February 28, part of gold's decline has stemmed from forced selling by investors covering losses in other assets within their portfolios. Gold ended last year at $4,319.37 per ounce. Last weekend, U.S. President Donald Trump issued a 48-hour ultimatum to Iran, demanding it reopen the Strait of Hormuz or face airstrikes on its power plants. Iran responded by warning that any attack on its electrical facilities would lead to a "comprehensive" blockade of the strategic waterway and strikes on energy, information technology, and desalination infrastructure. Trump's ultimatum was delivered at 7:44 p.m. New York time on Saturday. Kyle Rodda, an analyst at Capital.com, suggested that due to technical factors, "gold is poised for a short-term rebound." He indicated that much depends on "whether Trump follows through on his threat to strike Iran's power plants." A key momentum indicator, the 14-day Relative Strength Index for gold, fell further below the 30 level, which some traders view as a signal of oversold conditions. U.S. government data released on Friday showed that hedge funds and other large speculators increased their net-long positions in gold to the highest level in seven weeks as of March 17. At the time of writing, spot gold was down 1.69% at $4,415 per ounce. Silver fell 1.38% to $66.86. Platinum and palladium also traded lower. The Bloomberg Dollar Spot Index, which measures the U.S. currency's strength, rose 0.1%.