Gold prices rise amid global uncertainty: Should you invest now
Gold prices held steady near all-time highs on Tuesday (February 25), supported by safe-haven demand amid global economic uncertainties. In international markets, spot gold traded at $2,950.39 per ounce, just $6 shy of its all-time high of $2,956.15 per ounce.
US gold futures edged up 0.1% to $2,967.40 per ounce.
In India, 24K gold rose to ₹87,880 per 10 grams, while 22K gold climbed to ₹80,560 per 10 grams, according to Upstox data.
Factors driving gold prices
Gold’s rally is driven by rising geopolitical risks and fears of inflation linked to US tariffs. Market participants are closely watching the March 4 deadline for tariffs on Mexican and Canadian imports, as President Donald Trump reaffirmed that the measures remain “on time and on schedule.”
Additionally, uncertainty surrounding the Federal Reserve’s rate path is influencing investor sentiment.
While Fed officials may adopt a hawkish stance this week, markets have already priced in a prolonged rate hold, limiting its impact on gold prices.
Investors are also awaiting the US Personal Consumption Expenditures (PCE) report, the Fed’s preferred inflation gauge, due on Friday. The data could shape expectations for potential rate cuts later in the year.
Gold’s outlook
Colin Shah, MD, Kama Jewelry, believes gold will remain strong due to heightened volatility and weak US economic data.
“Gold prices are expected to stay afloat amid global uncertainties. The trajectory of the US dollar index (DXY) and USD will be key. While near-term profit booking may occur, mid-to-long-term bullish momentum is likely. We anticipate gold to test $3,000 per ounce in the mid-term,” he said.
Rahul Kalantri, VP Commodities, Mehta Equities, noted that safe-haven buying and ETF inflows are driving gold higher.
“Trump’s tariff threats, Russian drone attacks on Ukraine, and tensions in the Israel-Hamas ceasefire negotiations are fueling demand for gold.”
Technical levels and investment perspective
Gold has immediate support at $2,927-$2,895 per ounce and resistance at $2,958-$2,975 per ounce. In rupee terms, key support is at ₹85,850-₹85,620 per 10 grams, while resistance lies at ₹86,510-₹86,740 per 10 grams, according to Rahul Kalantri, VP Commodities, Mehta Equities.
As demand remains strong, analysts expect gold prices to sustain their upward trajectory, making it an attractive asset for long-term investors.
–With Reuters inputs