Spot gold declined 0.2% to $2,912.09 per ounce as of 05:31 GMT after gaining nearly 1% on Tuesday (March 4).
US gold futures rose slightly by 0.1% to $2,922.70 per ounce.
A firmer dollar made gold expensive for international buyers. The benchmark 10-year US Treasury yield also gained, reducing gold’s appeal.
Indian gold rates surge
Gold prices in India extended their rise for the second time this week. The 22-carat gold rate crossed ₹80,000 per 10 grams, while 24-carat gold remained above ₹87,000 per 10 grams, according to GoodReturns.
Trade tensions fuel safe-haven demand
The US imposed 25% tariffs on Mexico and Canada, along with a doubling of duties on Chinese imports to 20%.
In response, China and Canada introduced retaliatory tariffs, with Mexico expected to follow.
“Gold extended their gains as investors sought safe-haven assets amid escalating trade tensions,” said Rahul Kalantri, VP Commodities at Mehta Equities.
“A weaker dollar, which hit a three-month low due to a stronger euro, further supported prices. However, rising US bond yields and hopes of a Russia-Ukraine peace deal could cap gains,” he said.
Outlook for gold prices
Market participants are now focused on the upcoming ADP employment report and US nonfarm payrolls data. Additionally, China’s recent fiscal stimulus efforts signal potential demand growth.
Technically, gold has support at $2,888-$2,868 per ounce and resistance at $2,922-$2,940 per ounce. In Indian rupee terms, gold has support at ₹86,450-₹86,220 per 10 grams, while resistance is at ₹86,910-₹87,170 per 10 grams.
“Markets remain risk-averse as a global tariff war appears certain,” said Prithviraj Kothari, MD of RiddiSiddhi Bullions Limited. “Gold will likely remain in demand if uncertainties persist.”
Investment strategy
Despite short-term fluctuations, analysts see gold as a key hedge against economic instability. Investors should monitor US economic data and global trade developments for further price movements.
–With Reuters inputs
