US Dollar Strength Weighs on Gold, Silver Prices

Gold and Silver Prices Remain Subdued Amid Strong US Dollar and Concerns Over Interest Rate Cuts

Key Figures:

• $5,066: April futures contract on COMEX gold, day's low
• $59: decline in COMEX gold futures contract
• $81.51: May silver contract on COMEX, day's low
• $3.60: decline in May silver contract
• 1.34%: US dollar's strengthening against major currencies so far this week

Market Analysis

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The demand for gold and silver has remained subdued throughout this week, with prices capped by a strengthening US dollar and concerns over a delay in US interest rate cuts. The April futures contract on COMEX gold dropped $59 to $5,066 per troy ounce, extending its fall to a third straight day. The yellow metal is also on track to post its second consecutive weekly loss. The May silver contract on COMEX declined by $3.60 per troy ounce to reach the day's low of $81.51.

Geopolitical Tensions and Safe-Haven Demand

Geopolitical tensions typically increase demand for safe-haven assets, as investors tend to hold back from investing in riskier assets during periods of uncertainty and instead channel funds into gold and silver. However, the ongoing US-Iran conflict has triggered a sharp rise in demand for the US dollar, with funds flowing back to the US, keeping demand for the world's reserve currency elevated. The US dollar has strengthened by 1.34% so far this week, crossing the 100 mark for the first time since November 2025.

PCE Inflation Data and Fed Policy Outlook

Read also: Gold and Silver Prices in India: A Review of Current Rates Across Major Cities

The Personal Consumption Expenditures (PCE) Index, the Federal Reserve's preferred inflation gauge, rose 0.3% in January on a monthly basis, in line with economists' expectations. However, economic growth in the fourth quarter of 2025 was much slower than expected, with gross domestic product (GDP) growing at an annual rate of 0.7%. The US Federal Reserve will convene on 17 March, and while recent inflation data suggest price growth is moderating, the 13-day-old conflict involving Iran and the resulting spike in crude prices have yet to fully filter into the economic data.

Domestic Market

In the domestic market, gold futures on the Multi Commodity Exchange of India fell ₹1,507 per 10 grams to reach the day's low of ₹1,58,764 per 10 grams. Silver futures also declined, falling ₹7,210 per kilogram to reach ₹2,60,752. Both gold and silver are down by 1.54% and 2.19% in this week so far.