Gold Prices Climb as Weaker Dollar and Recession Fears Fuel Safe-Haven Demand

Gold prices surged in Asian trading on Tuesday, driven by a weakening U.S. dollar and escalating recession fears. The greenback hovered near a four-month low amid concerns over the economic impact of President Donald Trump’s trade policies, further fueling demand for the precious metal.

Investors Eye U.S. CPI Data for Fed Rate Clues

Market participants are now closely watching the U.S. Consumer Price Index (CPI) data set for release on Wednesday. This key inflation metric could significantly influence the Federal Reserve’s next monetary policy decision, especially against the backdrop of ongoing trade tariff uncertainties.

Spot gold rose 0.4% to $2,900.17 per ounce, while gold futures for April delivery edged up 0.2% to $2,904.50 per ounce by 02:36 ET (06:36 GMT).

Safe-Haven Appeal Strengthens Amid U.S. Recession Risks

The Trump administration’s 25% tariffs on imports from Mexico and Canada, along with additional levies on Chinese goods, have intensified concerns over a potential economic slowdown and rising inflation.

During a recent interview with Fox News, President Trump refrained from forecasting whether the U.S. might enter a recession in 2025, further adding to market uncertainty.

According to a Reuters poll, economic risks are mounting across North America as businesses and policymakers grapple with the unpredictable impact of Trump’s tariffs. The likelihood of a recession is increasing, boosting gold’s safe-haven appeal.

Meanwhile, the U.S. Dollar Index dipped 0.2%, lingering near a four-month low in Asian trading. A weaker dollar makes gold more attractive to international investors.

The Federal Reserve is set to meet on March 18-19 to determine its stance on interest rates. Market sentiment is hinging on February’s CPI data, which could provide further insights into the Fed’s policy direction.

Mixed Performance in Other Precious Metals

While gold continued its upward momentum, other precious metals exhibited mixed movements:

• Platinum futures declined 0.3% to $961.20 per ounce.
• Silver futures gained 0.3% to $32.638 per ounce.

Copper Prices Gain on Weaker Dollar and China Stimulus Hopes

Copper prices climbed on Tuesday, bolstered by a weaker U.S. dollar and expectations of economic stimulus from China. As the National People’s Congress concluded its annual session, investors anticipated measures to support the slowing Chinese economy, which could drive demand for industrial metals.

• London Metal Exchange (LME) benchmark copper futures rose 0.3% to $9,555.00 per ton.
• Copper futures for April delivery advanced 0.5% to $4.6685 per pound.

Conclusion

With global economic uncertainties intensifying, gold remains a preferred safe-haven asset. The upcoming U.S. inflation report and Federal Reserve meeting could set the tone for future gold price movements. Meanwhile, the weakening dollar and China’s stimulus measures continue to influence the broader commodities market, including copper and other industrial metals.

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