On March 5, gold prices declined due to a stronger US dollar and rising Treasury yields, with spot gold falling 0.2% to $2,912.09 per ounce. Investors are evaluating the impact of new US tariffs on trade partners. Indian gold rates surged, with 22-carat gold exceeding ₹80,000 per 10 grams. Trade tensions have increased safe-haven demand for gold, while retaliatory tariffs from China and Canada add pressure. Analysts suggest watching US economic data and trade developments, noting gold’s potential as a hedge against instability despite short-term fluctuations. Support levels are identified at $2,888-$2,868 per ounce.
Spot gold fell by 0.2% to $2,912.09 per ounce as of 05:31 GMT after having risen nearly 1% on Tuesday (March 4).
US gold futures saw a slight increase of 0.1% to $2,922.70 per ounce.
The stronger dollar made gold more expensive for overseas buyers. The benchmark 10-year US Treasury yield also increased, diminishing gold’s attractiveness.
Surge in Indian gold rates
In India, gold prices continued to climb for the second time this week. The rate for 22-carat gold surpassed ₹80,000 per 10 grams, while 24-carat gold remained over ₹87,000 per 10 grams, as reported by GoodReturns.
Safe-haven demand fueled by trade tensions
The US enacted 25% tariffs on Mexico and Canada, along with a significant increase in duties on Chinese imports to 20%.
In retaliation, both China and Canada implemented counter-tariffs, with Mexico expected to follow suit.
“Gold extended its gains as investors turned to safe-haven assets amid rising trade tensions,” stated Rahul Kalantri, VP Commodities at Mehta Equities.
“A weakening dollar, which reached a three-month low compared to a stronger euro, supported prices further. However, increasing US bond yields and hopes for a peace agreement between Russia and Ukraine could limit gains,” he added.
Gold price outlook
Market participants are currently focusing on the upcoming ADP employment report and the US nonfarm payrolls data. Moreover, China’s recent fiscal stimulus efforts may indicate potential demand growth.
From a technical perspective, gold has support levels at $2,888-$2,868 per ounce and resistance between $2,922-$2,940 per ounce. In terms of Indian rupees, gold support is at ₹86,450-₹86,220 per 10 grams, with resistance at ₹86,910-₹87,170 per 10 grams.
“Markets are likely to stay risk-averse as a global tariff war seems inevitable,” commented Prithviraj Kothari, MD of RiddiSiddhi Bullions Limited. “Gold is expected to remain in demand if uncertainties continue.”
Investment strategy
Despite experiencing short-term fluctuations, analysts regard gold as an essential hedge against economic instability. Investors should keep an eye on US economic indicators and global trade updates for indications of further price shifts.
–With inputs from Reuters