On March 3, 2025, gold prices saw a significant rise after hitting three-week lows previously, driven by geopolitical tensions and the looming impact of tariff policies set forth by U.S. President Donald Trump. Spot gold climbed by 1.1% to reach $2,890.57 per ounce, marking its recovery amid growing concerns over the trades between the U.S. and major partners such as China.
By 0939 GMT, spot gold had previously recorded gains of 0.3% to $2,868.54, reflecting volatility surrounding economic uncertainty and market reactions to recent tariffs. The increase from past lows consolidates the view of gold as a safe haven for investors during tumultuous economic times.
Trump’s recent tariff threats, including plans for additional duties on China, Mexico, and Canada set to take effect on March 4, have intensified market anxieties. Such tariffs could exacerbate already fragile trade relations, leading to cautious market sentiments and increasing the demand for gold as a secure investment alternative. According to Han Tan, chief market analyst at Exinity Group, “Gold's downside remains limited, ... amid rising geopolitical and economic growth uncertainties.”
Following Trump's announcement of potential 25% tariffs on imports from Canada and Mexico, the dollar index fell over 1%, making gold, priced internationally, more attractive for foreign investors who hold other currencies. The combination of this dollar weakness and global trade tension has played a pivotal role in driving up gold prices.
An upcoming payroll report, due from the U.S. on March 7, alongside the recent drop of the Atlanta Fed GDP Now forecast to -2.8%, has added layers of complexity to the economic outlook. While this indicates potential economic contraction, it simultaneously boosts gold’s appeal as investors hedge their positions against the anticipated economic turbulence.
UBS analysts forecast gold to potentially reach $3,200 per ounce under certain risk scenarios. They noted, We see room for larger gains in silver as the gold rally consolidates and global industrial production signals modest recovery.". Silver prices also reflected these trends, with increases noted previously, now reaching $31.77 per ounce, displaying similar demand dynamics.
Market volatility remains evident, especially considering mixed signals from manufacturing sectors. While the S&P Global Manufacturing PMI indicated improvement, rising to 52.7 from 51.2, the ISM Manufacturing PMI revealed stagnation at 50.3. These mixed signals suggest cautious optimism within the manufacturing sector but also highlight how economic data could influence market behavior and gold prices.
Investors are closely monitoring the economic contours with expectations swirling around the Federal Reserve's monetary policy. Recent assessments suggest money markets have adjusted predictions for interest rate cuts from the Fed, anticipating easing by as much as 71 basis points, hinting at broader economic challenges.
The recent rates of 24-carat gold at ₹8678.3 per gram reflect fluctuations influenced by both local and international markets. Recent analysis indicated gold rates fluctuated over weeks, with major cities like Delhi recording prices of ₹86783.0 per 10 grams as of March 3, 2025. Comparatively, Mumbai prices were at ₹86637.0 the same day, demonstrating the effects of local demand and global prices.
Despite these fluctuations, the general tone of gold pricing continues to be bullish, with Daniel Pavilonis of RJO Futures stating, I think ... we are in a very bullish market and gold can get much higher than $3,000. This sentiment aligns with expectations for increased central bank purchases amid uncertain economic environs.
Overall, as markets brace for the impacts of imminent tariffs and continued geopolitical tensions, gold is likely to remain at the forefront of investment discussions. The balance between safety and speculation creates pathways for price advancements with observers eager to see how these trends will play out through the coming weeks. Such dynamics underline the necessity for market participants to stay informed as reports are released and geopolitical developments continue to surface.