Gold marks third consecutive weekly gain, eyes $3,100 target

Spot gold closed with a loss of around 0.68% at $3023 on March 21, as the US Dollar Index firmed up. Profit booking and tentative selling sent the metal lower. However, with a weekly gain of around 1.5%, it was up for the third straight week.

Earlier in the week, gold rose to a fresh record high of $3057 on March 20, following the FOMC monetary policy decision delivered on March 19. The Committee’s new projections showed lower growth and higher unemployment and inflation in 2025 compared to its previous estimates. Additionally, the Fed's plan to reduce the pace of quantitative tightening (QT) also boosted the metal. Spot gold traded between $2982 and $3057 in the week ending March 21.

FOMC: As expected, the US Federal Reserve kept the Fed Fund rate unchanged in the 4.25%-4.50% range.

According to its new summary of projections, the US GDP growth rate is likely to slow down from the previous estimate of 2.1% to 1.7% in 2025, while core PCE deflator inflation is projected to rise from 2.5% to 2.80%. The Fed also anticipates the unemployment rate to edge higher from 4.3% to 4.4%. The central bank noted economic uncertainties due to Trump’s tariff plans, but it does not foresee an immediate rate move, though it may act if the job market weakens. The pace of quantitative tightening will be reduced from $25 billion per month to $5 billion in treasury holdings from April 1. The Fed signaled two rate cuts this year.

Live Events

Markets initially saw the Fed's rate cut signal as positive, despite elevated inflation.