Spot gold slumped 8.8 per cent to near $4,100 an ounce, while gold futures were down nearly 10 per cent at $4119.10 on expectations of higher global interest rates

Stocks were sold off in Asia on March 23 and gold plunged to wipe out its 2026 gains as the escalating Middle East war deepened global inflation fears.

With the war now in its fourth week and showing no sign of ending, the head of the International Energy Agency warned that the crisis was “very severe” and worse than the two oil shocks of the 1970s put together.

Analysts, meanwhile, have also raised the prospect of a surge in inflation that could force central banks to hike interest rates, while the choking off of fertiliser shipments has also fanned concerns about global food security.

Nikkei index shed 3.5 per cent at the close, Kospi index dipped 6.5 per cent, Hang Seng Index dropped 3.5 per cent, while the Shanghai Composite Index declined 3.6 per cent.

Straits Times Index closed down 2.2 per cent.

Spot gold slumped 8.8 per cent to near $4,100 an ounce, while gold futures were down nearly 10 per cent at $4119.10 on expectations of higher global interest rates. Gold generates no interest, so when central banks raise interest rates, investors tend to sell gold to invest in interest-yielding assets such as bonds or savings accounts.

Global oil benchmark Brent crude swung sharply, climbing 1.9 per cent initially before reversing to drop almost 1.8 per cent. Brent was up 1.4 per cent at $113.80.

Markets are definitely getting more nervous about what’s happening in the Middle East right now, Mr Martin Schulz, head of the international equity group at Federated Hermes, said on Bloomberg TV. Our view is it is time for caution, not panic. Duration is the main issue. The longer this drags out, obviously the worse it gets.