Precious metals traded with minor losses in Monday’s session, 9 March, as a stronger dollar capped gains, even as tensions in the Middle East remained high.
The April futures contract on COMEX gold dropped $80 to the day’s low of $5,012 per troy ounce, erasing all of the previous session’s gains. The contract had finished last week 1.70% lower, snapping its four-week winning run.
The May silver contract on COMEX also fell, dropping $4.67 per troy ounce to reach the day’s low of $79.64 earlier in the session. The white metal has lost nearly 10% of its value, ending a two-week winning streak.
The US Dollar Index regained strength today, climbing to 99.42 as the conflict with Iran showed no signs of easing and energy prices continued to rise, making dollar-priced commodities more expensive for holders of other currencies.
US Federal Reserve cut hopes dim
Supply fears are keeping crude oil prices elevated, with Brent crude oil futures reaching $120 per barrel for the first time since June 2022. However, prices later moderated after the Financial Times reported that some members of the Group of Seven were considering releasing strategic oil reserves to ease market pressure.
The unconfirmed report cited unnamed people familiar with the talks. The spike in energy costs has heightened concerns that interest rates could remain elevated for longer, with the yield on the benchmark 10-year Treasury note rising to its highest level in more than a month, according to Reuters.
Recent labour market data has also rattled investors, with the economy unexpectedly shedding jobs in February and the unemployment rate rising.
In theory, a weak jobs report would help build a case for the Federal Reserve to cut interest rates. However, hopes for rate cuts have been complicated by surging oil prices amid escalating tensions in the Middle East, raising fears that the ongoing war could last longer than expected and stoke global inflation.
Fed policymakers are scheduled to meet on 18 March, where they are widely expected to hold rates steady, with the first rate cut currently anticipated in July, according to the CME FedWatch Tool.
Gold is often viewed as a long-term inflation hedge, but it typically performs well in low-interest-rate environments because it yields no income.
Markets face a crucial week packed with high-stakes economic releases. Inflation data is due on Wednesday, followed by jobless claims, JOLTS figures, personal consumption expenditures data — the Fed’s preferred inflation gauge — and a second estimate of quarterly GDP later in the week.
MCX gold drops over ₹2,100; silver falls ₹7,500 per kg
In the domestic market, the gold futures contract on the Multi-Commodity Exchange of India fell ₹2,184 per 10 grams to reach the day’s low of ₹1,59,450 per 10 grams. The yellow metal finished last week down 0.30%, marking its first weekly decline in four weeks. So far this month, prices have fallen by ₹per 10 grams.
Silver futures also declined, falling ₹7,542 per kilogram to reach ₹2,60,743. Amid sharp volatility last week, prices closed 5% lower, ending a two-week winning run.
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