The demand for gold and silver has largely remained subdued throughout this week as a strengthening US dollar and concerns over a delay in US interest rate cuts have capped prices, even as tensions in the Middle East remained elevated.
The April futures contract on COMEX gold dropped $59 to the day’s low of $5,066 per troy ounce in today’s session, 13 March, extending its fall to a third straight day. The yellow metal is also on track to post its second consecutive weekly loss.
The May silver contract on COMEX also declined, falling $3.60 per troy ounce to reach the day’s low of $81.51 earlier in the session. So far this week, the white metal is down 2.11%, building on 9.6% losses in the previous week.
Strong US dollar caps safe-haven demand
Geopolitical tensions typically increase demand for safe-haven assets, as investors tend to hold back from investing in riskier assets during periods of uncertainty and instead channel funds into gold and silver, which are widely viewed as stores of value during times of heightened geopolitical risk.
However, the ongoing US-Iran conflict has pushed crude oil prices to multi-year highs, raising fears that it could increase consumer prices and delay interest rate cuts by global central banks, including the US Federal Reserve. At the same time, the tensions have triggered a sharp rise in demand for the US dollar, with funds flowing back to the US, keeping demand for the world’s reserve currency elevated.
The US Dollar in today’s trade crossed the 100 mark for the first time since November 2025 and has strengthened by 1.34% so far this week.
The stronger dollar makes commodity prices more expensive for holders of other currencies, thereby limiting demand for gold and silver.
PCE inflation data keeps Fed policy outlook in spotlight
The Personal Consumption Expenditures (PCE) Index, the Federal Reserve’s preferred inflation gauge, rose 0.3% in January on a monthly basis, in line with economists’ expectations of a 0.3% increase. On an annual basis, it rose 2.8% versus expectations of 2.9%.
Core PCE, which excludes the volatile food and energy components, rose 0.4% month-on-month, in line with economists’ forecasts.
However, economic growth in the fourth quarter of 2025 was much slower than expected, as gross domestic product (GDP) grew at an annual rate of 0.7% during the period. That revision was significantly lower than the prior estimate of 1.4% and well below the Dow Jones forecast of 1.5%, CNBC reported.
The US Federal Reserve will convene on 17 March, and while recent inflation data suggest price growth is moderating, the 13-day-old conflict involving Iran and the resulting spike in crude prices have yet to fully filter into the economic data.
While the central bank is widely expected to leave its key interest rate unchanged, its updated summary of economic projections will be closely scrutinized for revised inflation estimates.
Defiant rhetoric from leaders in Tehran and Washington signals that the Iran conflict remains far from de-escalation after nearly two weeks of fighting.
MCX gold drops over ₹1,500; silver drops to ₹2.60 lakh per kilo
In the domestic market, gold futures on the Multi Commodity Exchange of India fell ₹1,507 per 10 grams to reach the day’s low of ₹1,58,764 per 10 grams.
Silver futures also declined, falling ₹7,210 per kilogram to reach ₹2,60,752. Both gold and silver are down by 1.54% and 2.19% in this week so far.
(With inputs from Reuters)
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
