Gold Prices Retreat from Three-Week High Amid Profit-Taking and Stronger Dollar
On Tuesday, gold prices experienced a notable decline, falling from a more than three-week high reached earlier in the trading session. The retreat came as investors engaged in profit-booking following a significant rally the previous day, when bullion surged over 2%. Additionally, a stronger U.S. dollar contributed to dampening demand for the precious metal.
Spot gold dropped by 0.8% to $5,189.99 per ounce by 0125 GMT, breaking a four-session winning streak. The metal had gained 2.5% in the prior session. In the futures market, U.S. gold contracts for April delivery were down 0.3%, settled at $5,210.40. Ilya Spivak, Head of Global Macro at Tastylive, noted that the market was undergoing a "digestion" phase after the meaningful rally in gold prices. He also highlighted that unlike the panic seen on Wall Street recently, the Asian markets did not exhibit similar concern, despite subdued trading sentiment. Spivak attributed the pullback in gold prices to two main factors: investors locking in profits and a firmer U.S. dollar.
The dollar’s firming made gold, which is priced in greenback terms, more expensive for buyers using other currencies, thus exerting downward pressure on prices. Early Tuesday trading in Asian stock markets was mixed, reflecting lingering nervousness after a selloff on Wall Street overnight. Investor sentiment was unsettled by ongoing uncertainty around U.S. President Donald Trump’s tariff policies and escalating tensions between the United States and Iran.
President Trump had issued a warning to countries considering retreating from recently negotiated trade deals with the United States. Following the Supreme Court’s rejection of his emergency tariff measures, Trump cautioned that any retreat would provoke the imposition of substantially higher duties under alternative trade laws.
Meanwhile, developments in U.S. monetary policy also influenced market dynamics. Federal Reserve Governor Christopher Waller indicated openness to holding interest rates steady at the Fed’s upcoming March meeting, contingent on whether February’s employment data demonstrated that the labor market had strengthened after a weak performance in 2025. Market expectations, as measured by CME’s FedWatch Tool, currently anticipate three 25-basis-point rate cuts over the course of the year.
Other precious metals mirrored gold’s downward trend on Tuesday. Spot silver declined by 1% to $87.38 per ounce after reaching a more than two-week high on Monday. Spot platinum fell 0.7% to $2,139.25 per ounce, while palladium inched higher by 0.3% to $1,748.12. Overall, Tuesday’s session suggested investors were cautious, taking profits after recent gains amid a complex backdrop of geopolitical uncertainties and shifting economic policies. The strength of the U.S. dollar remains a critical factor shaping precious metal markets moving forward.