On the morning of March 31, the international spot gold market experienced a dramatic surge, with prices jumping $100 in just a few hours and breaking through the key psychological level of $4,500. This extraordinary rally was not accidental but the result of four core factors converging: a shift in Federal Reserve policy expectations, technical oversold recovery, rising geopolitical risk, and central bank gold purchases providing a floor.
First, expectations for Fed rate cuts reignited, putting short-term pressure on the dollar. On March 29, Federal Reserve Governor Milan publicly stated that four rate cuts are expected in 2026, with no need for further hikes, completely reversing the market’s previous hawkish outlook. The dollar index fell in response, and 10-year U.S. Treasury yields dropped from recent highs, reducing the holding cost of gold, a non-yielding asset, and accelerating capital inflows into the gold market.
Second, technical oversold conditions triggered a strong rebound, with bottom-fishing capital rushing in. After the sharp mid-March decline, technical indicators such as RSI and KDJ entered oversold territory, creating a strong repair demand. This morning, gold prices touched a low of $4,418/oz, prompting concentrated buying by bulls and triggering a technical rebound that quickly lifted prices, signaling renewed investor confidence in gold investment.
Third, escalating geopolitical tensions drove massive safe-haven flows. Continued uncertainty in the Middle East and rising risks in the Hormuz Strait increased market anxiety. Gold, recognized globally as the ultimate safe-haven asset, became the first choice for risk-averse capital, with large flows moving from equities and bonds into the gold market, further pushing up prices.
Finally, ongoing central bank purchases provided solid support. According to the World Gold Council, global central banks have achieved net gold increases for 18 consecutive months, with the Chinese central bank steadily purchasing gold for 16 months. The rigid demand from central banks effectively capped the downside risk of gold and underpinned the violent rebound, stabilizing bullish sentiment.
In summary, the morning surge of gold on March 31 was driven by a combination of policy shifts, technical recovery, geopolitical risk, and central bank actions. In the short term, maintaining gold prices above $4,500 may attract more momentum-driven buying and create a new upward trend. For investors, monitoring safe-haven demand, policy developments, and technical support is key to capturing opportunities in gold investment.
