The Morning Edge: Gold Surges Past $3,000 for First Time Amid Tariff-Driven Uncertainty

Gold broke through the $3,000 mark for the first time on Friday as investors rushed to the safe-haven asset, seeking protection from economic uncertainty triggered by US President Donald Trump’s tariff war. Spot gold hit a record high of $3,004.86 before easing 0.1% to $2,986.26. The metal has surged nearly 14% this year, driven by trade tensions, stock market selloffs, and rising central bank demand.

China expanded its bullion reserves for a fourth consecutive month in February, while India’s RBI added roughly 3 tonnes, bringing its total holdings to 879 tonnes as of January 31, 2025. Goldman Sachs warned of upside risk to its $3,100 end-2025 base case and $3,100-$3,300 forecast range, citing continued US policy uncertainty as a key factor supporting investor demand.

Data
The University of Michigan’s March survey revealed a sharp decline in US consumer sentiment, highlighting growing pessimism among American families about the economic outlook. Notably, the survey showed that consumers expect inflation to average 3.9% over the next five years—the highest reading in more than 30 years. Despite these warning signs, the Federal Reserve may hesitate to respond aggressively to a weakening economy, as concerns mount that the Trump administration’s trade policies could further fuel already elevated inflation. The data underscores the delicate tightrope the Fed must walk as it navigates an increasingly complex economic landscape.

Markets
Overnight
US stocks rallied on Friday, with the S&P 500 and Nasdaq posting their biggest one-day gains since November 6, as investors sought bargains after a week dominated by trade war fears and recession concerns. Despite Friday’s rebound, the S&P 500 and Nasdaq marked their fourth consecutive weekly decline, while the Dow also ended the week lower. All seven of the "Magnificent 7" AI-related stocks advanced, led by Nvidia, which jumped 5.3% ahead of its GPU Technology Conference, and Tesla, which rose 3.9% on reports of plans to produce a cheaper Model Y in Shanghai. The rally provided a temporary reprieve, but trade tensions continue to cast a shadow over investor sentiment.

US Treasury yields climbed on Friday as a rebound in the stock market dampened demand for safe-haven assets like government bonds. The yield on benchmark 10-year notes increased by 4.2 basis points to 4.318%, up from 4.276% on Thursday, while the 30-year bond yield rose 2.9 basis points to 4.6248%. The shift reflects renewed investor confidence in riskier assets, though lingering uncertainties continue to keep markets on edge. The yield on the 2-year Treasury notes, which closely tracks Fed’s interest rate expectations, rose 7 basis points to 4.023%, up from 3.953% late on Thursday. This increase reflects shifting market sentiment as investors reassess the outlook for monetary policy this week on March 18 and 19.  

The US dollar showed mixed performance on Friday, weakening against the euro but gaining ground against the Swiss franc and yen, as optimism grew that the US government would avoid a weekend shutdown. The currency was further supported by rising inflation expectations, which reinforced the view that the Federal Reserve will likely delay interest rate cuts. Meanwhile, the euro strengthened after German parties reached a fiscal deal aimed at boosting defence spending and reviving growth in Europe’s largest economy. The euro rose 0.28% against the dollar to $1.0882, while the dollar gained 0.44% against the pound and 0.63% against the Swiss franc. 

Brent crude oil prices rose 1% on Friday, nearly erasing weekly losses as investors weighed the fading likelihood of a swift resolution to the Ukraine war, which could have eased Russian energy supply constraints. Brent crude futures settled 70 cents higher at $70.58 a barrel, recovering from a 1.5% drop in the previous session. The rebound reflects ongoing uncertainty in energy markets as geopolitical tensions continue to influence supply dynamics.

Day’s Ledger
Economic Data:
- India February WPI inflation data
- India February trade data 
- US February retail sales data 
- US Atlanta Fed Jan-Mar GDP Nowcast 
- China February Industrial production data

Corporate Actions:
- NMDC board to consider dividend
- Indian Railway Finance Corporation board to consider dividend
- Five-Star Business Finance board to discuss fundraising plans
- Indian Renewable Energy Development Agency board to discuss fundraising plans

Policy
 -ECB President Lagarde Speaks   

Tickers

• ALKEM LABORATORIES announced that the USFDA conducted a Bioresearch Monitoring (BIMO) inspection at its Bioequivalence Center in Taloja, Maharashtra, from March 10 to March 13.
• BRIGADE ENTERPRISES has launched ₹27 billion residential project in Yelahanka, Bengaluru.
• CEIGALL INDIA has received a Letter of Award from the National Highways Authority of India.
• DR REDDY’S LABORATORIES recalls one batch of Levetiracetam in 0.75% sodium chloride injection single-dose infusion bags in the US due to incorrect labeling .
• GR Infraprojects has emerged as the selected bidder by the National Highways Authority of India for a project worth ₹42.63 billion.
• INDUSIND BANK - The Reserve Bank of India issued a statement addressing speculation regarding IndusInd Bank, stating that the bank remains well-capitalised and financially stable.
• INFOSYS’ subsidiary Infosys McCamish Systems LLC has reached an agreement in principle to settle six class action lawsuits in the US related to a cyber incident reported in November 2023.
• JB CHEMICALS’s API manufacturing facility in Panoli, Gujarat, successfully cleared a USFDA inspection without any observations.
• KEC INTERNATIONAL has received new orders worth ₹12.67 billion in the transmission & distribution and cable businesses. 
• MAHARASHTRA SEAMLESS has received an order worth ₹2.98 billion for the supply of seamless pipes for the oil & gas sector.
• NTC INDUSTRIES has withdrawn its proposal for the acquisition of a 51% equity stake in Solitude Flame, leading to the termination of the share swap agreement. 
• POWER GRID CORP approved an investment of ₹3.42 billion for two transmission projects.
• SHILPA MEDICARE’s owned subsidiary Shilpa Pharma Lifesciences has successfully cleared a USFDA inspection at its Unit-2 facility in Raichur with zero observations.
• TEJAS NETWORKS has received ₹1.23 billion from the Department of Telecommunications as an incentive for FY24 under the PLI scheme.
• WELSPUN SPECIALTY SOLUTIONS gets a formal purchase order worth ₹2.32 billion from Bharat Heavy Electricals.
• WIPRO announced a realignment of its Global Business Lines (GBLs) to enhance its focus on AI, cloud, and digital transformation while improving alignment with evolving client needs.
• ZYDUS LIFESCIENCES announced the successful completion of a USFDA inspection at its API Unit 1 in Ankleshwar, Gujarat.

Must Read

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• Navi Mumbai airport to be inaugurated in June, says Gautam Adani
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Daily Mantra
I learned that we can do anything, but we can't do everything... at least not at the same time. So think of your priorities not in terms of what activities you do, but when you do them. Timing is everything.