Analysts attributed the uptick to fresh buying by participants.
However, global gold prices edged lower, with Comex gold futures down 0.14% at $2,911.90 per ounce in New York.
Key factors driving gold prices
Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, cited geopolitical tensions and trade concerns as key drivers.
“Ukraine’s largest drone attack on Moscow and Russia’s threat of retaliation boosted safe-haven demand for gold. Meanwhile, the US job openings data showed an increase to 7.74 million in January, which could impact Federal Reserve rate expectations,” Chainwala said.
Looking ahead, investors are closely watching the US Consumer Price Index (CPI) data.
According to Bloomberg estimates, the CPI is expected to rise 0.3% in February, following a 0.5% increase in January.
A higher-than-expected inflation reading could dampen hopes for multiple Fed rate cuts in 2025, pressuring gold prices.
Gold’s tug-of-war at highs
Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL), highlighted that gold markets are witnessing a “tug-of-war” at high levels.
While a possible Ukraine ceasefire could weigh on gold, uncertainty over the Fed’s rate path and trade tensions continue to support prices.
Prathamesh Mallya, DVP-Research, Non-Agri Commodities and Currencies at Angel One Ltd, added that a weaker US Dollar Index has helped gold move higher.
However, he cautioned that gold’s role as an inflation hedge could weaken if sustained higher interest rates reduce its appeal.
Outlook for gold prices
Gold may remain volatile as markets await the US inflation data. A softer reading could reinforce expectations of rate cuts, supporting gold prices. However, any signs of persistent inflation may limit gains.
–With PTI inputs
