On March 4th, a sudden escalation in geopolitical tensions and macroeconomic uncertainties are intertwining to influence the precious metals market. GTC Zehui Capital suggests that while recent factors—including heightened Middle East conflicts, legal disputes arising from tariff policies, and stronger-than-expected inflation data—provide solid fundamental support for precious metals, the market is showing signs of needing a corrective phase after experiencing technical overbought conditions.
The escalation of Middle East tensions has further activated the safe-haven appeal of gold and silver. GTC Zehui Capital indicates that military actions against Iran and subsequent retaliatory strikes have not only significantly increased the premium on safe-haven assets but also raised concerns over potential supply disruptions in the crude oil market. Concurrently, legal challenges stemming from U.S. Supreme Court rulings on tariffs, along with the new administration's proposed broad tariff plans, are amplifying policy uncertainty. Additionally, the U.S. Producer Price Index recorded its largest monthly increase since early 2025, reflecting persistent inflationary pressures at the production level, which macroeconomically favors gold prices.
Market structure is undergoing subtle shifts based on positioning and inventory data. GTC Zehui Capital notes that although gold ETFs saw minor inflows, CFTC net long positions have declined noticeably. The silver market experienced significant redemptions and short covering, with net long positions accounting for less than 30% of the annual average. Meanwhile, COMEX silver inventories have dropped by over 5,300 tonnes since the end of the third quarter last year, returning toward normal levels. Gold inventories have also decreased by approximately 8% since the start of the year, remaining below the 2025 average. These changes suggest that speculative selling pressure within exchanges has been partially alleviated.
From a technical perspective, market sentiment is in a sensitive phase. Gold has currently touched the top of its upward channel, with the RSI indicator approaching the overbought zone near 70, while silver is seeking support at key Fibonacci levels following a deep pullback. GTC Zehui Capital believes that the upward momentum for gold and silver has been temporarily exhausted. Unless geopolitical crises worsen beyond expectations, the market is likely to enter a consolidation period to absorb overbought pressures. Nevertheless, as long as the safe-haven mode remains in place, the overall downside for precious metals appears relatively limited.
In summary, although short-term capital flows toward the U.S. dollar are weighing on gold and silver, the underlying logic of safe-haven demand remains intact. GTC Zehui Capital states that until the situation becomes clearer, the precious metals market will maintain high-level volatility within a risk-averse mode, and investors should watch for opportunities following technical corrections.