U.S. stocks plunge again, with the Dow dropping nearly 800 points! Spot gold rises by 2.54%

The situation in the Middle East remains tense, exacerbating the sell-off in U.S. stocks.

As of the close on March 27, the Dow Jones Industrial Average fell 1.73%, plummeting nearly 800 points to 45166.64, down 0.9% for the week; the S&P 500 Index dropped 1.67%, closing at 6368.85, down 2.12% for the week; the Nasdaq fell 2.15%, ending at 20948.36, down 3.23% for the week.

Large tech stocks collectively declined, with Meta and Amazon falling nearly 4%, Google, Microsoft, Nvidia, and Tesla dropping over 2%, and Apple down more than 1%. Chinese stocks listed in the U.S. mostly fell, with the Nasdaq Golden Dragon China Index down 1.9%.

Oil and gas, as well as gold stocks, saw widespread gains, with Halliburton rising over 4%, U.S. Energy up nearly 2%, and Occidental Petroleum gaining over 1%; Goldfields and AngloGold Ashanti surged over 4%, and Harmony Gold increased nearly 3%.

Gina Martin Adams, chief market strategist at HB Wealth Management, stated, “I believe the stock market is beginning to show signs of fatigue, and hopes for a quick resolution to the war are fading.”

“The ideal scenario has not materialized,” said Brian Mulberry, chief market strategist at Zacks Investment Management, noting that the market is starting to consider both a middle scenario and the worst-case scenario. For the stock market, the worst-case scenario is if oil prices remain above $100 a barrel by July.

In commodities, as of the close, WTI crude oil futures once again broke the $100 per barrel mark, closing up over 7% at $101.18 per barrel; Brent crude oil futures rose over 4%, closing at $106.29 per barrel.

Analysts believe the tense geopolitical situation in the Middle East, with the Strait of Hormuz being a critical artery for global oil transport, has led to heightened concerns about oil supply, driving prices up continuously.

Gold and silver also saw a significant surge on Friday, with spot gold briefly breaking through $4555 per ounce. As of the close on March 27, spot gold rose 2.5% to $4493.36 per ounce; COMEX gold futures increased by 2.6%. Spot silver rose 2.4% to $69.73 per ounce; COMEX silver futures gained 2.70%, closing at $69.77 per ounce.

In news, according to CCTV News on March 28, U.S. presidential envoy Wittehkov stated that talks with Iran are expected to take place this week. Wittehkov also mentioned that a response from Iran regarding the 15-point ceasefire proposal presented by the U.S. is expected soon.

On the night of March 27, according to Xinhua News, citing Iranian media, Israel and the U.S. attacked Iran’s Khondab nuclear facility, which houses a heavy water reactor. On the 27th local time, the Iranian Islamic Revolutionary Guard Corps issued a statement saying that after multiple attacks by the U.S. and Israel on Iranian industrial facilities, Iran decided to launch retaliatory actions.

Since the start of U.S. and Israeli military actions against Iran on February 28, gold prices have fallen by approximately 14%. This past Monday, spot gold prices dropped consecutively below $4500, $4400, $4300, $4200, and $4100, and at one point fell over 8% to $4098.25 per ounce. Subsequently, spot gold prices fluctuated, peaking at $4600 before pulling back, ending the week with an overall increase of 0.04%.

Tim Waterer, chief market analyst at KCM Trade, stated, “For several weeks, gold has been viewed as a liquid asset, with investors selling gold to cope with extreme volatility in other markets and margin calls. However, at current price levels, gold has become more attractive as a ‘value investment’ for investors, which is why it has regained favor.”

Ye Qianning, a precious metals researcher at GF Futures, believes that the current bottom for gold prices may have emerged, but some central banks are stabilizing domestic currency exchange rates by selling gold reserves, leading to fluctuating liquidity impacts. “It is expected that the international gold price’s stage low will be around $4000 to $4100 per ounce. Investors still need to wait for the right timing when considering long-term low allocations.”

Commerzbank has raised its gold price forecast, increasing its year-end target price from $4900 per ounce to $5000 per ounce, believing that recent pullbacks are unlikely to persist.

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