Gold Prices Near Record Highs Amid Profit-Taking and Global Uncertainty

Gold prices hovered near record highs on February 24, 2025, as traders locked in profits after last week’s peak of $2,954.69 per ounce.

Spot gold traded at $2,925.63 per ounce in early Asian markets, reflecting a 0.4% decline, while U.S. gold futures dipped 0.5% to $2,939.30 per ounce. In India, 24K gold prices stood at ₹87,760 per 10 grams in Mumbai, slightly lower than ₹87,770 on Saturday.

The market activity followed a weekend marked by easing geopolitical tensions. Investor sentiment remained cautious ahead of key U.S. inflation data due later this week.

The U.S. dollar’s weakness and declining bond yields continued to provide support for gold prices despite the recent pullback. Profit-taking emerged as a dominant theme after last week’s rally, which was fueled by geopolitical concerns and economic uncertainty.

Analysts noted that disappointing U.S. macroeconomic data had weakened the dollar, creating upward pressure on gold prices. However, Ajay Kedia of Kedia Commodities remarked that without fresh catalysts like escalating geopolitical risks or stronger inflationary signals, gold may struggle to breach the $3,000 mark.

The Indian market mirrored global trends but remained buoyed by seasonal demand during the wedding season. Domestic prices also reflected the rupee’s depreciation against the dollar, which has amplified gold’s cost locally.

Gold ETFs See Record Inflows

Despite high prices, January saw record inflows into gold ETFs globally, with India alone recording ₹3,751 crore in net inflows compared to ₹640 crore in December. Central banks worldwide have also bolstered gold reserves as part of a broader strategy to diversify away from the U.S. dollar.

The Reserve Bank of India added 2.8 tons to its reserves in January after a pause in December. Technically, gold remains within a bullish channel but faces resistance near $2,958-$2,975 per ounce internationally and ₹86,540 per 10 grams domestically.

Support levels are observed around $2,910-$2,895 per ounce globally and ₹85,300-₹85,420 domestically. Traders now await the U.S. Personal Consumption Expenditures (PCE) index later this week for clues on the Federal Reserve’s rate trajectory.

While short-term corrections persist due to profit-taking, analysts remain bullish on gold. Ongoing inflation concerns and geopolitical risks support their outlook.

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