Gold prices climb, but economic data could shift the trend

Gold prices rose sharply last week as a weakening US dollar and escalating trade tensions drove investors toward the precious metal. On Friday, 7 March, the MCX gold rate closed at Rs 85,820 per 10 gm, marking a Rs 1,618 increase from the previous week's closing price of Rs 84,202.

Despite the surge, gold remains Rs 729 below its all-time high of Rs 86,549 per 10 gm. In the international market, spot gold ended at Rs 2,910 per ounce, up by Rs 52 from the previous week's Rs 2,858, while COMEX gold prices settled at Rs 2,914 per troy ounce, reflecting a similar Rs 52 gain.

Market experts attribute this surge to the steep decline in US dollar rates and safe-haven demand triggered by global economic uncertainty. Sugandha Sachdeva, founder of SS WealthStreet, was quoted in Mint as saying, "The rally in gold prices reflects investors' growing preference for safe-haven assets amid an uncertain economic environment. Ongoing trade conflicts between the US and its major trading partners have raised concerns about global economic growth."

The trade dispute intensified earlier in the week when US President Donald Trump imposed a 25 per cent tariff on imports from Canada and Mexico and a 10 per cent tariff on Chinese goods.

However, a partial rollback of these tariffs later in the week capped gold’s safe-haven rally. The Trump administration delayed the full implementation of the 25 per cent tariff on Canadian and Mexican goods until 2 April, easing concerns slightly.

Meanwhile, the US dollar index saw a sharp decline of 3.5 per cent over the week, falling from 107.564 to 103.81 — its lowest level since November 2024. This marked one of the steepest weekly drops since 2013.

Additionally, weaker-than-expected economic data, including non-farm payroll numbers reporting only 151,000 job additions in February — below estimates — contributed to the dollar’s decline. The US unemployment rate also ticked up to 4.1 per cent from 4 per cent, signaling potential economic slowing.

Experts advise investors to maintain a buy-on-dips strategy as the overall trend for gold remains bullish. The MCX gold rate is currently fluctuating between Rs 83,500 and Rs 86,600 per 10 gm, while spot gold trades within a range of Rs 2,850 to Rs 2,930 per ounce.

Jateen Trivedi, VP research — commodity & currency at LKP Securities, highlighted that gold faces strong resistance at $2,915-$2,925 in COMEX, with MCX gold encountering resistance at Rs 86,400 per 10 gm. Key support levels remain at Rs 84,500 and Rs 84,000.

Similarly, Sugandha Sachdeva noted, "On the domestic front, gold prices are facing significant resistance in the Rs 86,350 to Rs 86,600 per 10 gm zone. A breakout could push prices toward Rs 87,500 per 10 gm, while failure to breach resistance may lead to a downward correction, with support at Rs 84,300 and Rs 83,500 per 10 gm."

Looking ahead, market participants will closely monitor key US economic indicators, including the core Consumer Price Index (CPI) for February, the Producer Price Index, and weekly unemployment claims. Any fresh developments in ongoing tariff disputes could also play a crucial role in shaping gold prices.

"Overall, while gold remains in a strong uptrend, investors should remain vigilant about key resistance levels and macroeconomic data releases that could influence its trajectory," Sachdeva said.