Gold prices remained under pressure, hovering near a two-week low on Thursday as a modestly stronger US dollar limited the metal’s appeal. Traders opted for the greenback as expectations of prolonged higher interest rates in the US kept demand for non-yielding assets like gold subdued.
The US dollar index edged higher, supported by firm Treasury yields and cautious sentiment in global markets. Investors remained focused on signals from the Federal Reserve, with policymakers reiterating their commitment to maintaining restrictive monetary policy until inflation trends decisively lower.
Despite concerns over economic slowdown risks, gold failed to gain traction as risk appetite remained fragile. While geopolitical uncertainties and recession fears typically bolster safe-haven demand, the market’s preference for cash and dollar-based assets kept upside potential in check.
Gold US Dollars per Ounce 1-D Chart as of February 28, 2025 (Source: TradingView)
Meanwhile, expectations for lower physical demand from major buyers like China and India also contributed to gold’s weakness. Softer economic data from China has raised doubts about the strength of consumer demand, further dampening near-term sentiment for the metal.
With investors awaiting key US economic data, any surprises in inflation figures or labor market strength could drive fresh volatility in gold. A stronger-than-expected data print may push the dollar even higher, exerting additional pressure on gold prices.
For now, gold remains vulnerable to further losses unless market sentiment shifts or the Federal Reserve softens its stance. Traders are watching for signs of a reversal, but continued strength in the dollar could keep gold under pressure in the near term.
