Gold Soars 2% Amid Easing Inflation from Lower Oil Prices
On March 25, gold jumped roughly 2% as easing inflation signals from lower oil prices reduced rate-hike expectations. Spot gold traded near $4,558.03 per ounce at 1005 GMT. The metal had fallen to a four-month low of $4,097.99 earlier in the week.
Market moves
U.S. gold futures for April delivery rose about 3.5% to $4,556.30. Oil sank more than 5% on hopes of a month-long ceasefire involving Washington. The drop in crude helped ease inflation worries.
Other precious metals
- Silver gained about 2.2%, trading near $72.76 per ounce.
- Platinum rose roughly 1.3% to $1,959.15 per ounce.
- Palladium increased about 1.1% to $1,455.25 per ounce.
Drivers behind the rally
Lower oil prices eased inflation concerns and curbed bets on more aggressive interest-rate hikes. That dynamic supported bullion, as investors recalibrated expectations. Money market futures signal markets see less chance of central bank hikes.
Rate outlook and commentary
Investors trimmed the odds of a Fed rate increase by December to about 16%, down from 25% on Friday. Peter Fertig of Quantitative Commodity Research noted the rise in money market futures. UBS warned that gold does not always gain during geopolitical tensions.
Federal Reserve Governor Michael Barr said rates may need to remain steady for some time. Chair Jerome Powell recently signaled a more cautious tone on rate cuts. UBS said the Fed’s easing bias still appears intact.
Geopolitical context
Oil’s slide followed optimism over a possible ceasefire tied to the U.S. and Iran conflict. Iran’s military denied U.S. claims of active negotiations, calling the U.S. self-negotiating. Markets reacted to mixed signals from the region.
Reporting by Ishaan Arora in Bengaluru for Filmogaz.com. Edited by Arun Koyyur.
