Both gold and silver saw renewed buying in Friday’s session as traders reacted to the unexpected drop in new US jobs data, boosting prospects of a US Federal Reserve rate cut, though a stronger dollar capped gains.
Gold, which usually remains hot during periods of geopolitical tensions, gained $104 per troy ounce on Comex to the day’s high of $5,182 per ounce on March 6. The May silver futures contract, too, strengthened $3.15 per troy ounce to reach the day’s high of $85.33.
On the economy front, the US economy lost 92,000 jobs in February, while economists were expecting a gain of 50,000. The unemployment rate also rose to 4.4%.
In theory, a weak jobs report would help build a case for the Federal Reserve to cut interest rates, and gold responded to the data with a surge, although it has since pared back some of those gains.
However, hopes for interest-rate cuts have been complicated by surging oil prices amid escalating tensions in the Middle East, raising fears that the ongoing war will last longer than expected and could stoke global inflation.
In addition, strength in the dollar and Treasury yields has been standing in the way of gold reclaiming its place as a safe-haven asset this week and has left the metal on track for its first weekly decline in five weeks.
Middle East tensions escalate
On the geopolitical front, the US–Israel war with Iran extended into its seventh day on March 6, with the latest comments from both sides indicating that tensions continue to escalate in the region. Donald Trump wrote on Truth Social that there would be “no deal with Iran” unless it agrees to “unconditional surrender,” outlining a hardline stance as the conflict in the Middle East continues to intensify.
Earlier, Iranian Foreign Minister Abbas Araghchi told NBC News that his country had no intention of negotiating and was prepared for a ground invasion, although US President Donald Trump later told the same network that he was not considering such a move.
Fed policymakers will meet on March 18, where they are widely expected to hold rates steady, with the first rate cut widely expected 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.
MCX gold jumps over ₹2,800 per 10g; silver reclaims ₹2.70 lakh per kg
On the domestic front, the April gold futures contract on MCX jumped ₹2,839 per 10 grams to reach the day’s high of ₹1,62,512, but it is on track to close the week in the red.
The silver May futures contract advanced ₹8,309 per kilogram to the day’s high of ₹2,70,500 per kilogram.
Although the white metal has regained strength, it is still on track to close the week about 4% lower.
(With inputs from Reuters)
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
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