Gold and Silver Prices Stabilize on February 25 After Sharp Decline as Strong US Dollar Caps Gains
Gold and silver prices steadied in early trade on Tuesday, February 25, following a sharp decline in the previous session. A firm US dollar and improved risk appetite in global equities kept safe-haven demand in check, limiting any meaningful rebound in precious metals.Spot Gold Holds Near Recent Highs
Spot gold was trading near $5,146.18 per ounce as of 0054 GMT. The metal had earlier climbed to a more than three week high during the week before slipping over 1 percent on Tuesday after touching that peak in early Asian trading.US gold futures for April delivery were down 0.2 percent at $5,165 per ounce, reflecting cautious positioning by traders after the recent surge.
The stabilization comes after a volatile start to the week, as currency movements and shifting rate expectations shaped short term sentiment in the bullion market.
Silver Prices Ease After Two Week High
Silver prices also moderated slightly. Spot silver fell 0.2 percent to $87.13 per ounce after reaching a more than two week high on Monday.The pullback in both metals underscores the influence of currency strength and global risk trends on precious metals pricing.
Stronger US Dollar Limits Upside in Gold
The US dollar index edged up by 0.02 percent, extending gains from the previous session. A stronger dollar generally makes dollar denominated commodities more expensive for overseas buyers, thereby restricting upside in gold and silver.Currency strength remained a key headwind for bullion, even as broader macroeconomic expectations pointed to potential easing later in the year.
Fed Signals Steady Rates; Markets Price in Cuts
Two US Federal Reserve officials indicated that there are no immediate changes expected in the current interest rate settings.However, markets are factoring in three 25 basis point rate cuts this year, according to CME’s FedWatch tool. Expectations of easing monetary conditions over the medium term typically lend support to non yielding assets such as gold, as lower rates reduce the opportunity cost of holding bullion.
Global Equities Advance on AI Optimism
Global equities moved higher on renewed optimism surrounding artificial intelligence driven business growth. The improved risk sentiment reduced immediate demand for traditional safe haven assets like gold.This combination of firm equities and a resilient dollar contributed to the stabilization seen in early trading.
Domestic Outlook: Key Levels for April Gold Contract
In the domestic market, Jateen Trivedi, VP Research Analyst, Commodity and Currency at LKP Securities, pegged support for the April gold contract near ₹1.58 lakh per 10 grams, while resistance is seen around ₹1.62 lakh per 10 grams.He noted that volatility is likely to remain elevated amid ongoing geopolitical developments. Any escalation in tensions or breakdown in talks could quickly revive safe haven demand and influence gold prices.
As global macro signals remain mixed, traders are closely monitoring currency movements, rate expectations, and geopolitical cues for direction in the precious metals market.
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