Zhuochuang Information: The strengthening U.S. dollar suppresses precious metals; geopolitical and trade outlooks affect long-term trends

This week, gold showed a pattern of rising then falling back. As of March 5th, the domestic 99.99% spot gold price was 1,151.26 yuan per gram. The evolution of Middle Eastern geopolitical tensions has led to divergent logic in gold’s influence. First, the fragmentation of geopolitics has reduced market risk appetite, with safe-haven sentiment supporting gold and driving precious metals higher. Meanwhile, expectations of rising oil prices could lead to increased global energy costs, which, through supply chain transmission effects, push up inflation levels. Due to gold’s nature as a form of natural currency, it is inherently supported as an inflation hedge. On the other hand, this event is part of Trump’s efforts to strengthen U.S. dollar settlement dominance in the global crude oil trade system, which has a certain stimulative effect on the U.S. dollar index, indirectly putting pressure on gold prices. The macro outlook remains mixed, with both bullish and bearish factors. It is recommended to monitor the ongoing game between Trump and the Supreme Court regarding global tariffs and tariff refunds, U.S. non-farm payrolls and CPI data, as well as further developments in Middle Eastern geopolitical tensions. Short-term, gold is expected to fluctuate within a wide range. (Zhuochuang Information)