Gold targets $3,100 after three weekly gains

Spot gold closed at $3023 on March 21, losing 0.68% due to a stronger US dollar. Despite this drop, it enjoyed a weekly gain of about 1.5%. This marks the third consecutive week of gains for gold, which briefly reached a record high of $3057 earlier in the week after the Federal Open Market Committee's (FOMC) monetary policy announcement. The FOMC decided to keep the Fed Fund rate unchanged between 4.25% and 4.50%. The committee projected a decrease in US GDP growth from 2.1% to 1.7% for 2025, while they expect inflation to rise and unemployment to increase. This new outlook contributed to the rise in gold prices. The pace of quantitative tightening will also slow next month. Gold prices traded between $2982 and $3057 during the week. Although markets initially reacted positively to the idea of potential rate cuts, reconsiderations about the strength of the US economy helped boost the dollar, which put pressure on gold prices. The US Dollar Index increased for the third consecutive day, closing at 104.09. Strong economic data, such as housing starts and jobless claims, helped support the dollar. Yields on ten-year US bonds also rose slightly after a period of decline. Global gold ETF holdings have increased alongside the rising prices, reaching a record high since October 2023. Meanwhile, Chinese investors have been warned about the volatility in gold prices. In geopolitical news, tensions in the Middle East continue to rise, with Israel threatening to annex land in Gaza. There are ongoing efforts to negotiate a ceasefire between Ukraine and Russia. Upcoming economic data releases will include manufacturing and services PMIs, new home sales, and consumer confidence metrics. The outlook for gold seems positive, driven by concerns about tariffs, anticipated rate cuts, and geopolitical tensions. However, gold may dip early next week before possibly rising again. Investors are keeping an eye on the $3100 target.