Gold’s wild ride: Prices soar past ₹87,560 in India, but Fed’s hawkish stance sparks global retreat

Gold prices soared amid global uncertainties and robust investor demand. In India, gold breached the ₹87,560 per 10 grams mark. On Monday, gold prices on the MCX hovered at an intraday low of ₹84,750 per 10 grams.

Comex gold futures traded lower on Wednesday, near $2,910 per ounce, retreating further from the all-time high set in the previous session. This decline was mainly triggered by Federal Reserve Chair Jerome Powell's hawkish remarks, which reinforced expectations of slower rate cuts this year.

Investors are now focused on the upcoming U.S. inflation report. Powell's statement that officials will be "patient" before easing monetary policy led to a rise in 10-year U.S. Treasury yields, putting downward pressure on gold prices, as the precious metal does not generate interest income. However, ongoing safe-haven demand, fueled by escalating trade tensions due to new tariffs and dovish stances from other major central banks, continues to support gold's upside potential.

Additional factors contributing to gold's appeal include sustained central bank purchases and heightened geopolitical risks, particularly after Israel issued a warning regarding the Gaza ceasefire.

A commodities research report from Kotak Securities states, "WTI crude oil prices fell below $73.50 per barrel following an American Petroleum Institute report indicating a substantial 9-million-barrel increase in U.S. crude stockpiles. This potential year-high inventory surge, if confirmed by official EIA data later this evening, will further weigh on market sentiment. Traders are also monitoring official figures for a potential rise in Canadian crude flows to the U.S., especially after recent tariff threats. Additionally, U.S. sanctions appear to be disrupting Russian crude exports, leaving Pacific platform crude stranded and forcing lower prices for ESPO-grade crude offered to Chinese refiners."

LME base metals are trading mixed, with copper, zinc, and lead in positive territory, while aluminium is trading lower. China has tightened requirements for building new copper smelters in its latest attempt to curb relentless capacity expansion in the world's top producer of refined copper. LME aluminium is down by more than 1% as investors assess the impact of U.S. tariffs on imports. The U.S. will impose a 25% levy on aluminium and steel imports from March 12, potentially disrupting global trade in these metals. This situation is causing uncertainty in the aluminium market, according to the report.