Gold prices edged higher on Tuesday (March 11) as a weaker dollar and lower US Treasury yields supported the metal. Investors are closely watching US inflation data to gauge the Federal Reserve’s next move on interest rates.
Spot gold rose 0.3% to $2,898.27 per ounce at 0501 GMT.US gold futures gained 0.1% to trade at $2,902.50 per ounce.
The dollar index remained near a four-month low, making gold cheaper for overseas buyers. Benchmark US 10-year Treasury yields also declined, adding to gold’s appeal.”The US dollar and Treasury yields are lower, which is helping gold catch support. The overall uptrend remains intact, favoring the upside,” said Ilya Spivak, head of global macro at Tastylive.
“Gold prices are consolidating between $2,885 per ounce and $2,935 per ounce, spurred by a weaker US dollar and safe-haven flows as fears about the US economy grow amid growing trade tensions,” said Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL).
Indian gold pricesIn India, 24-carat gold prices dropped by ₹330 per 10 grams to ₹87,490.
Meanwhile, 22-carat gold rates rose by ₹300 to ₹80,200 per 10 grams.
Market drivers
Gold has been trading within a range of $2,830 to $2,960 per ounce over the past month.
Investors are now awaiting the US Consumer Price Index (CPI) data, due on Wednesday, to assess the Fed’s stance on interest rates.
Political uncertainties have also added to gold’s strength. Geopolitical tensions remain high, with reports of attacks in Ukraine and Russia. Meanwhile, trade concerns persist after US President Donald Trump imposed tariffs on imports from Mexico and Canada, later exempting some for a limited period.
“Gold prices are supported by high geopolitical tensions. The market remains cautious ahead of the US inflation report,” said Kaynat Chainwala, AVP-Commodity Research, Kotak Securities.
The CME FedWatch Tool indicates a 97% probability that the Fed will keep rates unchanged at its March 19 meeting.
Expectations for a rate cut by June 18 have risen to 93.7%.
Gold is considered a hedge against inflation and political risks. However, if inflation forces the Fed to maintain higher rates, it could weigh on the metal’s appeal in the long run.
–With Reuters inputs
First Published: Mar 11, 2025 12:26 pm IS
