On March 4, following a deep correction in the previous trading session, the gold market demonstrated resilience during Wednesday's Asian trading hours. FXGT noted that while the strong performance of the U.S. dollar index has exerted periodic pressure on commodities, the return of geopolitical risk premiums is prompting investors to reassess the safe-haven value of precious metals. Currently, gold prices are attempting to recover lost ground, digesting the sharp volatility caused by macroeconomic factors and escalating regional conflicts.
The market is seeking a balance amid multiple intertwined forces. Spot gold recorded a 1.2% gain after touching around $5,150.63, while silver rebounded sharply by 3% following an 8% plunge, trading at $84.44. From a macroeconomic data perspective, the U.S. dollar index surged 1.5% over two days, hitting a six-week high, which directly increased holding costs for international buyers. At the same time, FXGT indicated that the rise in the 10-year U.S. Treasury yield further diminished gold's appeal. However, geopolitical uncertainties provided a counterbalancing force. Targeted U.S. actions against Iranian-related targets and the resulting retaliatory threats have led to a sharp increase in uncertainty surrounding energy shipping routes in the Persian Gulf. Investors are concerned that if the conflict spreads further, it could cause structural damage to the global energy supply chain.
Beyond safe-haven premiums, inflation dynamics are also undergoing subtle shifts. FXGT stated that elevated oil prices are transmitting energy inflation expectations to the precious metals market, complicating the global central banks' monetary policy pivot. Besides gold and silver, industrial metals such as copper also saw a modest increase of about 0.8%, trading at $13,049.33 per ton. Currently, the precious metals market stands at a crossroads: on one side lies the demand for safe-haven assets driven by geopolitical turmoil, while on the other side, macroeconomic headwinds from a strong dollar and high-interest-rate environment persist.
In summary, the current rise in precious metals exhibits clear technical recovery characteristics, with subsequent momentum depending on whether safe-haven sentiment can continue to offset the dollar's strength. FXGT indicated that until the market fully digests the potential breadth of geopolitical conflicts, gold and silver prices may maintain high volatility. For traders, closely monitoring the U.S. dollar index trends and the latest developments in the Middle East situation will be key to navigating short-term fluctuations.