Gold prices edged higher on Monday as a weaker U.S. dollar and ongoing geopolitical uncertainty fueled safe-haven demand. Delays in Ukraine-Russia peace talks, along with concerns over U.S. tariff policies, have contributed to market volatility, pushing investors toward gold.
Gold Market Update (March 3, 2025)
Spot gold: Up 0.3% to $2,866.19 per ounce (as of 0525 GMT)
U.S. gold futures: Rose 1% to $2,875.80 per ounce
Dollar index (.DXY): Dropped 0.4% from a recent two-week high, making gold cheaper for non-dollar holders
Kelvin Wong, senior market analyst at OANDA, attributed the early Asian bullish sentiment in gold to heightened geopolitical risks stemming from the delayed Ukraine-Russia peace deal.
Geopolitical and Economic Drivers
Ukraine-Russia Conflict: Ukrainian President Volodymyr Zelenskiy’s meeting with U.S. President Donald Trump ended poorly, increasing uncertainty in global markets.
U.S. Tariff Policy: Commerce Secretary Howard Lutnick announced that tariffs on Canada and Mexico will take effect on Tuesday at 25%, while Trump is set to double tariffs on Chinese goods from 10% to 20%.
Economic Data: U.S. consumer spending unexpectedly declined in January, though rising inflation could delay Federal Reserve interest rate cuts.
While gold is traditionally seen as a hedge against geopolitical instability, its appeal tends to diminish in a high-interest-rate environment.
Other Precious Metals
Platinum: Down 0.3% to $944.70 per ounce
Palladium: Up 0.7% to $925.25 per ounce
Analysts caution that demand for industrial metals like platinum and palladium may decline if U.S. tariffs on auto imports negatively impact vehicle sales.
With ongoing geopolitical tensions and economic uncertainty, gold’s upward trend may continue as investors seek safe-haven assets.
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