Gold Prices Surge Amid U.S. Dollar Decline and Trade Tensions

Gold prices experienced a notable uptick last week, driven primarily by a significant drop in the U.S. dollar and ongoing trade disputes involving the United States and its trading partners. As of last Friday, the Multi Commodity Exchange (MCX) gold rate closed at ₹85,820 per 10 grams, marking an increase of ₹1,618 from the previous week’s close of ₹84,202. Although prices peaked at ₹86,356, they remained just shy of the all-time high of ₹86,549.

International Gold Market Trends

In the global arena, the price of spot gold rose to $2,910 per ounce, reflecting a $52 increase compared to the prior week’s closing at $2,858. Similarly, the COMEX gold price reached $2,914 per troy ounce, also up by $52 from the previous week’s close of $2,862.

• MCX Gold Rate: ₹85,820 per 10 gm
• International Spot Gold: $2,910 per ounce
• COMEX Gold Price: $2,914 per troy ounce

Factors Influencing Gold Prices

Market analysts suggest that the resurgence of gold prices can be attributed to the weakening U.S. dollar and a growing demand for safe-haven assets amid economic uncertainty. This uptick coincided with U.S. President Donald Trump‘s announcement of a delay in the full implementation of a 25% tariff on goods from Canada and Mexico until April 2.

According to Sugandha Sachdeva, Founder of SS WealthStreet, “The rise in gold prices underscores investors’ heightened preference for safe-haven assets as economic conditions remain unpredictable.” The recent trade conflicts have raised alarms regarding both U.S. and global economic growth, prompting many to turn to gold as a hedge.

U.S. Dollar and Economic Indicators

The U.S. dollar index plummeted by 3.5% last week, sliding from 107.564 to 103.81, its lowest point since November 2024. This steep decline represents one of the most significant weekly drops since 2013. Weak economic indicators, including a reported 151,000 new jobs in February and an increase in the unemployment rate to 4.1%, have also contributed to the rising gold prices.

• U.S. Dollar Index: Dropped to 103.81
• New Jobs Created: 151,000 in February
• Unemployment Rate: Increased to 4.1%

Trade War Concerns and Gold Demand

Recent actions by the U.S. administration, including imposing tariffs on imports from Mexico and Canada, have ignited fears of a trade war. This scenario typically drives investors towards gold as a protective strategy against economic volatility.

Key Price Levels to Watch

For those investing in gold, it’s essential to keep an eye on critical price levels. Jateen Trivedi, a research analyst at LKP Securities, indicated that the current gold market is facing significant resistance around $2,915 to $2,925 in COMEX, with MCX resistance noted at ₹86,400. Support levels are established between ₹84,500 and ₹84,000 per 10 grams.

• Resistance Levels:
  • MCX: ₹86,400
  • COMEX: $2,915 – $2,925
• Support Levels:
  • MCX: ₹84,500 – ₹84,000

Looking Ahead: Economic Indicators and Gold Prices

As market participants brace for upcoming economic data, including the U.S. core CPI and Producer Price Index, these indicators will play a crucial role in shaping the trajectory of gold prices. Additionally, any new developments in trade negotiations will significantly impact market sentiments.

In conclusion, while the outlook for gold remains positive, investors are urged to remain cautious about potential resistance levels and the macroeconomic landscape that could influence future price movements.