Gold Stays Below $2,900 as Dollar Strength and Treasury Yields Weigh on Markets

Gold prices dropped below the critical $2,900 per troy ounce mark on Thursday, February 27, pressured by a stronger U.S. dollar and rising Treasury yields.

According to data from the COMEX division of the New York Mercantile Exchange (Nymex), gold futures for April delivery closed at $2,895.90, marking a 1.18% decline. The precious metal is now on track to end the week with losses exceeding 2%.

Investors took profits after recent highs, further driving prices lower. The dollar index gained 0.2% during the session, making gold less appealing for holders of other currencies.

Meanwhile, U.S. 10-year Treasury yields climbed, reducing the attractiveness of non-yielding assets like gold. Overnight trading extended the downward momentum as markets awaited U.S. Personal Consumption Expenditures (PCE) inflation data, a key indicator for Federal Reserve policy.

In India, gold prices mirrored global trends. On the Multi Commodity Exchange (MCX), April contracts fell by ₹496 ($83) to ₹84,700 ($14,117) per 10 grams.

Gold Market Faces Pressure Amid Stronger Dollar

A stronger rupee and subdued local demand contributed to the decline. In China and other parts of Asia-Pacific, gold demand remained stable despite global price pressures. ETF flows also reflected shifting sentiment.

While January saw record inflows due to heightened risk aversion, February inflows slowed as prices corrected. Analysts noted that profit-taking and macroeconomic factors outweighed geopolitical uncertainties, such as ongoing U.S.-China trade tensions.

Technical analysis suggests bearish momentum persists. Gold faces immediate support at $2,854 and resistance at $2,878. A break below $2,850 could accelerate selling pressure toward $2,835 or lower. Market participants remain cautious ahead of the PCE inflation report.

Rahul Kalantri of Mehta Equities remarked that rising yields and a stronger dollar continue to weigh on gold’s short-term outlook. Prithviraj Kothari of RiddiSiddhi Bullions observed that gold remains a hedge against uncertainty but faces consolidation after recent peaks.

Traders expect gold to trade between $2,850 and $2,900 today unless significant economic surprises emerge. The market’s focus remains on inflation data and its implications for Federal Reserve policy decisions.

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