Gold rate today: Despite tensions in the Middle East intensifying, precious metals have pulled back sharply in Tuesday’s session, March 3, weighed down by a strong US dollar, which has made greenback-priced commodities more expensive for holders of other currencies.
Gold, often deemed a safe-haven asset by investors during times of crisis, fell $230 per troy ounce (Comex) to $5,081 per ounce on March 3. The March silver futures contract on Comex crashed $10.79 per troy ounce to reach the day’s low of $78.06.
The US dollar index, which measures the greenback against a basket of major currencies, jumped to 99.38, marking its highest level since January 20, supported by safe-haven flows.
Traders are worried that rising energy prices may ripple through the economy, pushing up costs at a time when investors are hoping inflation will ease enough to prompt the Federal Reserve to cut interest rates again later this year.
Markets have pushed back expectations for the next US Federal Reserve rate reduction to September from earlier forecasts of July, although two 25-basis-point cuts are still priced in.
While bullion is regarded as a hedge against inflation over the long term, higher inflation can also translate into higher real yields and a firmer dollar, keeping borrowing costs elevated for longer and dampening appetite for the non-yielding metal.
Middle East conflict enters fourth day
The conflict in the Middle East has entered its fourth day, with the US, Israel, and Iran intensifying attacks on each other, sending crude oil prices to multi-month highs. Iran stepped up its attacks, striking energy infrastructure in Gulf countries and targeting tankers carrying crude oil.
Tehran also reportedly attacked the US embassy in Riyadh, Saudi Arabia’s capital, with drones while vowing a full closure of the Strait of Hormuz, through which nearly 20% of global oil flows and over 40% of India’s crude imports transit.
Israel reportedly said it was striking both Iran and Lebanon simultaneously after Tehran-backed Hezbollah launched missiles and drones toward Tel Aviv.
Recent statements from the White House indicated that the ongoing conflict is likely to intensify in the coming days.
US President Donald Trump said the war, which began on Saturday with a strike that killed Iran’s Supreme Leader Ayatollah Ali Khamenei, was going “substantially” ahead of schedule but warned it could continue for more than four weeks.
Meanwhile, a senior US official reportedly indicated that Washington is preparing for a significant ramp-up in attacks on Iran within the next 24 hours, targeting the country’s missile production facilities, drone programmes, and naval assets.
MCX gold drops over ₹6,000 per 10g; silver falls back to ₹2.60 lakh per kg
In the domestic market, ₹6,425″>April gold futures on MCX fell ₹6,425 to the day’s low of ₹1,59,649 per 10 grams, erasing all the gains the yellow metal had made in the previous two sessions. However, gold has remained higher over the last 10 months.
The March silver futures contract declined even more sharply, falling ₹18,471 per kilogram to the day’s low of ₹2,60,010. In the previous trading session, prices came within striking distance of the ₹3 lakh mark.
(With inputs from Reuters)
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