Gold Monthly for March 2026

Demand Rebuilds Amid Inflation Stickiness, Slowing Growth and Geopolitical Risk

Gold entered February 2026 consolidating around $4,800, after a steep fall from its late-January peak of $5,598. For much of the month, price action remained choppy, with price oscillating broadly between $4,700 and $5,000 as persistent dip-buying interest offset lingering macro uncertainty¹. A softer U.S. dollar, driven by signs of disinflation, provided intermittent support, keeping market attention firmly on key economic data releases. Eventually, gold broke out of its consolidation range, reclaiming the $5,000 level and extending gains of nearly 19% from the month’s low as geopolitical tensions, mixed U.S. data, sustained positive inflows, and renewed tariff uncertainty reinforced confidence in gold.

The key drivers for gold momentum in February were fivefold –

Outlook:

• Emerging signs of stagflation from US economy:
US growth momentum cooled meaningfully while core inflation remained firm. The advanced estimates showed Q4 US growth slowing sharply to 1.4% annualized from 4.4% in Q3, while core PCE inflation accelerated to 3.0% year-on-year, with a firm 0.4% monthly gain². Data on Friday showed that U.S. producer prices rose by 0.8% more than expected at 0.3%, suggesting inflation could pick up in coming months1. The combination of moderating GDP growth and resilient core PCE inflation reinforced a stagflationary undertone.

• Shifting US Rate Expectations:
The minutes from Federal Reserve painted slightly hawkish tone. The communication leaned cautious, with policymakers signalling reluctance to ease prematurely. While this capped the upside in gold, the absence of a renewed tightening bias also prevented any downsides either. The US Dollar Index rebounded but remained broadly range-bound showcasing signs of its inability to make meaningful headway due to ebb and flow of disinflation expectations, providing intermittent support to gold.

• Escalating Geopolitical Risks:
U.S. and Israel launched coordinated strikes on Iran, reportedly killing Supreme Leader Ayatollah Ali Khamenei, marking a sharp escalation in Middle East tensions and materially elevating global geopolitical risk. The incident has moved beyond rhetoric and military posturing into direct confrontation, amplifying uncertainty across markets. Iran responded forcefully, targeting Israel, U.S. military bases across the region and critical civilian infrastructure in neighbouring Gulf states, raising the spectre of a broader regional conflict and embedding a deeper risk premium into global asset prices.

• Trade Policy Risk:
Trade policy uncertainty intensified after the Supreme Court of the United States struck down the administration’s tariff regime enacted under 1977 emergency powers, ruling the legal basis invalid. The decision marked a setback for President Donald Trump and briefly disrupted the existing tariff structure. However, the move did not signal de-escalation. The administration swiftly invoked Section 122 of the Trade Act of 1974, introducing a 10% global tariff with scope to raise it to 15% for 150 days, partially replacing the invalidated measures. Markets viewed the sequence not as resolution, but as continued policy uncertainty, reinforcing trade friction concerns and sustaining uncertainty led demand for gold.

• Structural Allocation Flows:
Beyond macro signals, the quality of buying shifted. Data from the World Gold Council as on 20th Feb’2026, showed exchange-traded product holdings rising through the month, with year-to-date inflows crossing one million ounces³. The pickup in flows signalled a meaningful shift from the cautious tone seen earlier in the month and coincided with gold’s rebound from recent lows, reinforcing the improvement in broader market confidence.

March Outlook: Inflation, Labour Signals & Geopolitical Triggers

• Unlike prior contained flare-ups, the current escalation US – Israel – Iran war has drawn in multiple Middle Eastern nations, raising the risk of a sustained and volatile phase rather than a short-lived shock. U.S. President Donald Trump indicated that the U.S. campaign against Iran could last four to five weeks, shifting market focus from event risk to duration risk. Gold being a safe- haven asset , is expected to be on the bullish and supportive bias, with any progressive talks being the immediate risk to this short-term outlook.

• On the data front, March’s key focus will be on upcoming inflation and labour data, as these could reshape expectations around interest rates. Markets will closely track both core and headline inflation to assess whether February’s 3.0% core reading marked a pause in price pressures or the beginning of a more persistent trend.

• In March, the Federal Reserve’s policy decision on 18 March will be a key focal point for markets. The Federal Reserve is widely expected to keep rates unchanged at 3.50% –3.75%, reinforcing a cautious stance toward easing. Such an outcome would likely sustain underlying dollar firmness unless the accompanying communication signals a more dovish shift. The event could trigger bouts of volatility in the yellow metal, particularly if forward guidance meaningfully alters expectations for the timing of rate cuts.

• Employment indicators, including payroll growth and wage data, will also be important in shaping views on the timing of policy moves. In addition, PMI surveys and consumer sentiment data will offer further insight into the strength of US economic growth following the slowdown seen in Q4.

• The US President’s authority under Section 122 only enables the imposition of tariffs for up to 150 days. What happens after that?

Long term:

• The macro picture is closely resembling a late-cycle economic environment characterized by slowing growth, sticky inflation pockets, elevated fiscal uncertainty and persistent geopolitical risk. Unless growth re-accelerates decisively alongside rapid disinflation, the balance of risks over the year remains skewed toward structurally constructive view of prices rather than sustained downside.

• Powell is likely to preside over only two more FOMC meetings and is expected to resist rate cuts absent a clear deterioration in labour market conditions. As we approach the midterm elections in the US, Trump will be keen to project a stronger economy, thus conflicting and making rate cuts politically and economically harder to justify. Within that narrow window of Powell exit and Trumps economic posturing, there could be possibility of two rate cuts under the new Trump nominated Fed chair, which could further fuel gold.

• The Trump administration is likely to pursue policies aimed at boosting economic activity ahead of the November 2026 mid-term elections. Alongside more traditional fiscal stimulus and the residual impact of last year’s “One Big Beautiful Bill,” policy efforts could extend to easing access to mortgage credit, encouraging banks to more actively monetise their Treasury holdings, and potentially revaluing the Treasury’s gold reserves.

• If a combination of Federal Reserve easing and government stimulus succeeds in lifting growth, the resulting illusionary boom could raise the risk of a sharp macro adjustment thereafter, with elevated inflation and slowing growth potentially producing a stagflationary environment. Historically, stagflation has been among the most supportive macroeconomic backdrops for gold.

• Further, the prospects of a weakening dollar and mounting questions over its reserve-currency status have acted as a significant catalyst for the ongoing bull run in gold. Amidst the vacuum created by the lack of credible alternative currency capable of assuming global reserve status, central banks are expected to continue increasing gold allocations as a strategic diversification tool.

• The possibility of further consolidation cannot be ruled out and should be viewed as an opportunity to incrementally increase exposure. A disciplined, strategic approach to allocation remains prudent, with gold serving as a diversification and risk-management tool. A disciplined allocation of about15% to gold remains optimal for diversification and risk management within a balanced portfolio.

Source : Bloomberg¹, Bureau of Economic Analysis – U.S. Department of Commerce². World Gold Council³.

Above article is authored by Quantum.

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