Gold Prices Dip Amid Strengthening Dollar
Gold prices dropped on Tuesday as investors took the opportunity to cash in after a more than 2% rise in the previous session. The increase was further hampered by a stronger dollar.
By 0125 GMT, spot gold was down 0.8% at $5,189.99 an ounce, breaking a four-session winning streak and moving away from the three-week highs it had reached earlier. Interestingly, bullion had surged 2.5% during pre-market trading.
Meanwhile, US gold futures for April delivery fell 0.3% to $5,210.40. Ilya Spivak, head of global macro at TastyLive, observed, “There was a meaningful rally in gold yesterday. There’s been a bit of digestion happening, but it’s notable that the panic we’re seeing on Wall Street hasn’t really affected Asian markets.” He mentioned the strong dollar and profit-taking by investors as key reasons for the decline in bullion.
Asian stock markets experienced a downturn in early trading as the overnight sell-off on Wall Street unnerved investors. Concerns over President Donald Trump’s tariff policies and rising tensions involving the US and Iran also dampened sentiment.
The dollar’s slight strengthening made gold, priced in dollars, more expensive for those holding other currencies.
On Monday, President Trump cautioned countries against opting out of recently negotiated trade agreements with the US, threatening them with significantly higher tariffs under alternative trade laws if they did so, following the Supreme Court’s decision to invalidate emergency tariffs.
Additionally, Federal Reserve President Christopher Waller expressed readiness to maintain interest rates during the March meeting, provided that February’s job report indicates a solid labor market despite the downturn in 2025.
The market currently anticipates three rate cuts of 25 basis points this year, according to CME’s FedWatch tool.
In related commodities, spot silver slipped 1% to $87.38 an ounce after reaching its highest point in over two weeks the day before. Spot platinum fell as well, and palladium saw a minor increase, rising 0.3% to $1,748.12.
