1. Total Metals Corp (TSXV:TT, FSE: O4N)
Total Metals Corp. is focused on advancing high-grade gold projects to production.
Influenced by both geopolitical tensions and expectations surrounding the Federal Reserve’s monetary policy, the gold market experienced sharp fluctuations this week. Price saw a modest rebound on Friday (March 6th), yet still recorded its first weekly decline in five weeks.
Spot gold rose 1.4% to $5,149.14 per ounce at Friday’s close, but posted a weekly loss of 2.4%. U.S. gold futures for April delivery settled 1.6% higher at $5,158.70. The market’s constant balancing act between safe-haven demand and macroeconomic pressures highlights the complexity of the current price drivers for gold.
Stagflation Signals in Jobs Data Strengthen Rate Cut Expectations
Friday’s release of the U.S. February nonfarm payrolls report became a market focal point. The data showed an unexpected decrease of 92,000 jobs last month, falling significantly short of economists’ expectations for a gain of 59,000 jobs. The unemployment rate rose to 4.4%. Despite the weakness shown in the labor market, wages continued to trend higher, sparking concerns about the risk of “stagflation.”
Independent metals trader Tai Wong noted, “The combination of heavy private sector job losses and higher wages whispers stagflation. The key is whether this will be enough to help gold recover from what has been a disappointing week.” The CME FedWatch tool indicates markets broadly expect the Fed to hold rates steady at its March 18th meeting, with the first rate cut now widely anticipated in July. As a non-yielding asset, gold typically performs well in a low-interest-rate environment, and the weak jobs data provides support for rate cut expectations, thereby boosting gold prices.
Escalating Middle East Conflict Underpins Safe-Haven Demand
On the geopolitical front, the conflict in the Middle East appears to be expanding. Israel carried out airstrikes on Beirut’s southern suburbs after issuing an unprecedented evacuation order for the entire area. This marks a major escalation in the war against Iran, initiated a week ago alongside the United States. Market concerns over the conflict’s potential to spread further provided a solid foundation of safe-haven buying for gold.
However, the transmission of safe-haven demand is not unidirectional. The escalation also pushes oil prices higher – crude prices this week posted their sharpest weekly gain since Russia’s invasion of Ukraine in February 2022, intensifying worries about a resurgence of inflationary pressures. If inflation remains persistently high, it could force central banks to maintain restrictive monetary policies, thereby putting pressure on gold prices.
Strong Dollar Emerges as Key Headwind
The core factor suppressing gold prices this week originated in the currency markets. The U.S. dollar index recorded its largest weekly gain in over a year, driven by safe-haven capital flows into dollar-denominated assets amid the geopolitical tensions. Hugo Pascal, a precious metals trader at InProved, analyzed, “Algorithmic sellers are calibrated to automatically sell when the dollar strengthens; this is part of the reason for the underperformance in precious metals this week.” For buyers holding other currencies, the cost of dollar-priced gold increases accordingly, dampening actual demand.
From a technical perspective, despite Friday’s rebound, the weekly close in negative territory suggests bears maintain short-term dominance. Analysts suggest the market is not yet fully pricing in a prolonged geopolitical crisis. If the conflict continues to fester, investors may turn back to gold as a hedge; conversely, if tensions ease, macroeconomic data and central bank policy paths will likely reassert dominance over the market direction.
Among other precious metals, spot silver rose 2.6% on Friday to $84.30 per ounce; platinum edged up 0.5% to $2,131.50; palladium fell 1.1% to $1,646.84. In line with gold’s trend, silver, platinum, and palladium all recorded losses for the week.
