Spot gold slipped 0.3% to $2,885.40 per ounce as of 0300 GMT.
US gold futures dropped 0.2% to $2,895.40.In India, 24K gold fell by ₹10 to ₹86,210 per 10 grams, while 22K gold declined to ₹79,540 per 10 grams, according to Upstox.
Market factors influencing gold
US President Donald Trump confirmed that 25% tariffs on imports from Mexico and Canada would take effect from 0501 GMT Tuesday (March 4).
Additionally, tariffs on Chinese goods would double to 20%, escalating trade tensions. Trump also warned of reciprocal duties on countries imposing tariffs on US products from April 2.
These tariff measures are expected to drive inflation, boosting gold’s appeal as a hedge. However, a prolonged inflationary environment may force the US Federal Reserve to maintain high interest rates, which could weigh on non-yielding gold.Kyle Rodda, a financial market analyst at Capital.com, said, “This pullback is part of a broader shake-out. Prices could dip into the $2,700s per ounce before resuming the primary uptrend.”
Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, said, “Ongoing tariff concerns and dollar volatility continue to support gold as a safe-haven asset. However, any positive developments in Russia-Ukraine relations or global trade negotiations could pressure prices.”
Key economic events to watch
Investors are closely watching economic indicators for further clues on gold’s trajectory. The ADP employment report is due on Wednesday (March 5), followed by the US non-farm payrolls report on Friday (March 7). These data points will be critical in shaping the Federal Reserve’s rate outlook.
The outlook
JPMorgan maintains a long-term bullish stance on gold, projecting prices near $3,000 per ounce by Q4 2025.
Trivedi expects gold to trade in the range of ₹83,800-₹85,250 in the near term. He noted that any resolution in the Russia-Ukraine conflict or positive trade developments could limit gold’s upside.
Prithviraj Kothari, MD of RiddiSiddhi Bullions Limited (RSBL), added, “Geopolitical tensions, including disputes between Ukraine and the US, alongside Europe’s differing stance on Russia, will continue to drive safe-haven demand for gold.”
–With Reuters inputs
