Gold prices ticked higher on Wednesday as investors sought safe-haven assets amid rising global uncertainty. Meanwhile, oil prices fell, easing inflation concerns and sparking expectations for potential rate cuts.
Spot gold increased 0.2% to $5,202.10 per ounce by 0525 GMT. At the same time, U.S. gold futures for April delivery declined 0.6% to $5,211, reflecting mixed investor sentiment.
Additionally, oil prices dropped below $90 per barrel after reports indicated the International Energy Agency plans the largest release of reserves in its history. This measure aims to curb surging global oil costs.
Analysts explained that as inflation fears eased, gold’s safe-haven appeal strengthened further. Nikos Kavalis, Singapore managing director of Metals Focus, noted that bullion remains attractive during economic uncertainty.
Meanwhile, the ongoing conflict involving the U.S. and Israel against Iran continued to worry global markets. Pentagon and Iranian sources described the airstrikes as the most intense of the war.
Consequently, the Strait of Hormuz, a critical chokepoint for nearly a fifth of global oil and liquefied natural gas shipments, effectively shut down. Tankers remained stranded for over a week, forcing producers to halt output temporarily.
As a result, energy prices surged briefly, which further reinforced demand for gold. So far this year, bullion has risen more than 20%, reaching successive record highs amid geopolitical and economic concerns.
Furthermore, Kavalis projected that gold could surpass $6,000 an ounce by the third or fourth quarter and may climb even higher early next year.
Investors are also closely watching U.S. inflation indicators. The consumer price index for February is expected later today, while the Personal Consumption Expenditures index is due on Friday. These reports will influence Federal Reserve decisions.
At the same time, markets expect the Federal Reserve to keep rates steady at the end of its two-day meeting on March 18. However, traders still anticipate at least two rate cuts this year, according to CME Group’s FedWatch tool.
Meanwhile, other precious metals showed mixed movements. Spot silver fell 0.2% to $88.24 per ounce, platinum rose 0.1% to $2,202.52, and palladium gained 0.9% to $1,669.82.
In conclusion, gold prices remain highly sensitive to both geopolitical tensions and U.S. economic data. Therefore, investors continue to view bullion as a key safe-haven asset worldwide.
