Inflation Fears Cap Gold Despite Geopolitical Risks

Brent crude climbed above $92, its highest in nearly two years, while the U.S. jobs report showed a surprising 92,000 payroll loss in February and unemployment rose to 4.4%. Counterintuitively, Treasury yields also moved higher, with the 10-year yield reaching 4.13%.

This contradictory market action suggests that investors are increasingly prioritizing concerns about inflation re-acceleration, driven by higher energy costs, over recession fears. The market's focus on potential delays in Federal Reserve easing, which keeps yields elevated and the U.S. dollar firm, appears to be offsetting gold's traditional safe-haven appeal.

While structural demand for gold, including central bank buying, remains supportive in the medium term, the immediate outlook is for continued volatility. Gold's short-term trajectory will likely depend on whether inflation fears persist, keeping the dollar strong and yields high, or if growth concerns ultimately drive safe-haven demand.