Gold and silver prices have plunged sharply in March so far, entering bear market territory and marking their steepest monthly decline in 45 years, wiping out all gains made so far in 2026.

Gold has fallen over 20 percent this month, while silver has declined about 33 percent, making it the sharpest fall for both precious metals since March 1980. From its recent high's both Gold and Silver down nearly 24 percent and 41 percent respectively.

With this, both gold and silver have entered a bear phase. A fall of more than 20 percent over a short period is generally considered as entering bear market territory. The decline comes despite gold and silver’s traditional status as safe-haven assets, with prices falling continuously since the escalation of the US-Israel conflict with Iran last month.

Why are gold, silver prices falling?

Experts said gold and silver, as investment assets, compete with other asset classes for capital flows. When alternative assets—especially safe ones offering higher returns—become more attractive, demand for gold and silver tends to weaken.

Currently, global government bonds are emerging as a strong competing asset. Higher yields make bonds more attractive compared to gold, which does not offer any interest. With rising geopolitical tensions, US yields are at their highest levels in months after a third straight week of bond losses on speculation that the Federal Reserve may be compelled to raise borrowing costs to combat inflation.

Australia’s 10-year yields climbed to their highest level since 2011, while New Zealand’s yields are at their highest since May 2024. India’s 10-year yield rose to levels last seen in January 2025, while Japanese and South Korean bond yields have also moved higher.

Treasuries joined a broader decline in global bonds last week as fears of escalation in the Iran war drove crude prices higher. The Bank of England and the European Central Bank both signalled that policy tightening may be warranted, while Federal Reserve Chair Jerome Powell said the central bank needs to see more progress on inflation before cutting rates.

The US Treasury yield curve flattened last week, with two-year yields rising 18 basis points to 3.90 percent and 10-year yields climbing 10 basis points to 4.38 percent, extending gains since the conflict began. The 10-year yield rose further by three basis points on March 23. The average yield in Bloomberg’s Global Aggregate Treasuries Total Return Index is now around 3.46 percent, the highest since May 2024.

At the same time, rising crude oil, natural gas and fuel prices have increased inflation concerns, reducing the likelihood of central banks cutting interest rates. This creates a double impact—interest rates remain elevated while bond yields rise—further reducing the appeal of gold.

Another key factor has been selling pressure from global investors. As equity markets correct sharply, leveraged investors face margin calls, forcing them to liquidate assets. Gold and Silver, which has delivered strong returns in recent periods, becomes an easy asset to sell to raise cash, accelerating the decline.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said gold and silver have fallen mainly due to selling across markets, as central banks divert funds toward oil purchases rather than accumulating reserves. He added that equities in several markets have also declined, while the dollar index and oil are the only asset classes showing strength.

Technical levels

Spot gold’s low around $4100 marks a key support level, aligned with the lower end of the falling channel from its record high near $5600 and close to the 200-day moving average. If this level fails to hold, the next major support is seen near $3800. However, daily momentum is the most oversold since October 2023 lows, indicating the possibility of a short-term bounce toward $4300–$4350, as long as $4186 holds.

Silver’s decline from its record high has been steeper than gold’s. The recent fall has breached the February low of $64, bringing focus to support levels around the 200-day average at $57 and former resistance near $54, which had earlier capped prices before the rally toward $121.

Akshay Chinchalkar, Managing Partner and Head of Markets Strategy at The Wealth Co, said weekly momentum is not yet oversold and caution is warranted. He added that macro conditions have shifted significantly since the war began, with global central banks now preparing for rate hikes instead of rate cuts, removing a key support factor for gold.

What investors should do

Experts said investors should avoid panic selling during short-term corrections and instead focus on long-term strategies. Market volatility highlights the importance of diversification and disciplined asset allocation, with price corrections offering opportunities to increase exposure.

Kranthi Bathini of WealthMills Securities Private said investors with a long-term horizon can consider buying gold in a staggered manner during dips. He added that gold remains in a long-term bull market, with the current decline being a medium-term correction.