Explained: Why are gold prices rising across the globe? What to expect in March

Gold prices have witnessed a remarkable surge globally, with the precious metal hitting a peak of ₹65,298 per 10 grams in India on the MCX in the first week of March 2024. This surge has sparked considerable interest, particularly due to speculations about an impending interest rate cut by the US Federal Reserve in June. In this comprehensive guide, we delve into the factors driving this surge, its impact on the international and domestic markets, and what to anticipate in March.

1. The Upward Trajectory: A Closer Look

In the opening days of March, gold experienced a substantial spike, exceeding ₹2,700 in India. Analyzing this trend, we explore the factors contributing to this surge and its significance in the global economic landscape.

1.1 Anticipation of US Federal Reserve Rate Cut

The primary driver behind the surge is the widespread anticipation of an interest rate cut by the US Federal Reserve in June. This expectation has had profound effects on both domestic and international markets, directly influencing the upward trajectory of gold prices.

1.2 International vs. Domestic Trends

While global gold prices faced a 0.25 percent decline in February, closing at $2032.8 per ounce, the domestic market experienced a 0.67% decrease in the same month. However, March brought an unexpected reversal, marking a significant spike in gold prices globally and domestically.

2. Silver’s Short-Term Setback

Amidst the gold surge, MCX Silver rates experienced a temporary setback, with a notable drop in the first week of March. Despite this setback, experts foresee a substantial rise in March, providing a holistic perspective on the precious metals market.

2.1 Silver’s Rebound Predictions

Silver’s dip, trading at ₹74,015 per kg, is projected as a transient setback. Analysts predict a notable recovery with an anticipated rise of ₹2,859 or 4.01% in March, offering a contrasting narrative to gold’s upward trajectory.

3. Unpacking the Surge: Insights and Influences

To comprehend the surge in gold prices, it is essential to dissect the contributing factors and understand their implications on the global economic landscape.

3.1 Dollar Index Decline

A significant catalyst for the gold surge has been the decline in the dollar index (DXY), dipping below the 104 mark. Standing at 103.80 against a basket of major currencies, this decline has buoyed gold prices internationally.

Also read : Unlocking Gold’s Potential: A Comprehensive Guide to Gold Monetisation Scheme (GMS)

3.2 US Federal Reserve’s Influence

Anticipated interest rate cuts by the US Federal Reserve have had a considerable influence on global markets. Expected to be announced by June, these cuts are pivotal in shaping the trajectory of gold prices.

3.3 Central Banks’ Gold Acquisitions

Data from the World Gold Council reveals that central banks acquired 1,037 metric tons of gold in 2023, slightly below the 2022 record. This acquisition trend contributes to the sustained surge in gold prices.

3.4 Geopolitical Tensions and Macroeconomic Uncertainty

Experts quoted by Mint suggest that geopolitical tensions and macroeconomic uncertainties are significant contributors to the ongoing upward trend in gold prices. The global economic landscape, coupled with the US monetary policy, adds further complexity to the dynamics.

4. What to Expect in March: Projections and Forecasts

Looking ahead, experts predict that the upward trend in gold prices is poised to continue throughout March. This projection considers geopolitical tensions, macroeconomic uncertainties, and the impending US monetary policy decisions.

FAQs (Frequently Asked Questions)

Q: What triggered the recent surge in gold prices?
The surge in gold prices is primarily attributed to the decline in the dollar index (DXY), the anticipation of an interest rate cut by the US Federal Reserve, and central banks’ continued acquisitions of gold.

Q: Why did silver experience a drop while gold surged?
Silver’s short-term setback is attributed to transient market dynamics. Despite the dip, experts anticipate a significant rise in silver prices in March.

Q: How do geopolitical tensions impact gold prices?
Geopolitical tensions contribute to the uncertainty in the global economic landscape, influencing investors to seek refuge in gold as a safe-haven asset.

Q: Are interest rate cuts the sole driver of gold prices?
While interest rate cuts play a significant role, other factors such as the decline in the dollar index, central bank acquisitions, and geopolitical tensions contribute to the overall surge in gold prices.

Q: What is the significance of the dollar index decline?
The decline in the dollar index boosts gold prices internationally, making the precious metal more attractive to investors.

Q: Will the surge in gold prices continue in March?
Experts predict that the upward trend in gold prices is likely to persist throughout March, considering geopolitical tensions and macroeconomic uncertainties.

MCX – Official Website:

• “For real-time updates on MCX Silver rates and market trends, refer to the official MCX website: MCX.