By Antonio Di Giacomo, Senior Market Analyst at XS.com
Gold prices posted another decline on March 5, 2026, extending the losses seen earlier in the week and moving closer to the $ 5,050-per-ounce level. The precious metal was mainly pressured by the strengthening of the U.S. dollar, amid rising geopolitical uncertainty and economic data reinforcing the resilience of the U.S. economy.
Tensions in the Middle East have been a major catalyst for the recent movements in financial markets. Attacks on vessels and disruptions to maritime traffic through the Strait of Hormuz have heightened concerns about global energy supply, driving oil prices sharply higher and increasing demand for the U.S. dollar as a safe-haven asset.
The surge in crude oil prices has raised fears of renewed inflationary pressures in the global economy. This environment has strengthened the dollar against other currencies, which typically puts downward pressure on gold because the metal becomes relatively more expensive for investors holding other currencies.
Adding to this geopolitical backdrop were positive U.S. labor market figures, which further supported the dollar’s momentum. Corporate layoff announcements dropped sharply in February, reflecting a notable improvement in labor market conditions and suggesting that companies remain relatively optimistic about economic activity.
Meanwhile, initial jobless claims remained at moderate levels and below market expectations. This performance confirms that the U.S. labor market remains resilient despite risks stemming from the international environment and still-restrictive financial conditions.
The combination of a strong labor market and elevated energy prices has generated caution among investors regarding the future trajectory of the Federal Reserve’s monetary policy. Although markets still anticipate potential rate cuts this year, persistent inflationary pressures could delay a shift toward a more accommodative stance.
In this context, market attention is now focused on the release of the February Nonfarm Payrolls report. This data will be crucial for assessing whether employment strength continues and whether the U.S. economy can maintain resilience amid geopolitical tensions and tight financial conditions.
From a technical perspective, gold is currently correcting after recently reaching historic highs. The area near $5,000 per ounce is emerging as a key psychological level that could provide short-term support, while immediate resistance is again around the recent highs if the metal regains upward momentum.
In conclusion, gold’s recent behavior reflects the delicate balance between its traditional role as a safe-haven asset and the strength of the U.S. dollar during periods of global tension. As the crisis in the Middle East continues to drive volatility in energy and financial markets, investors will remain focused on U.S. macroeconomic data and Federal Reserve decisions, factors that are likely to shape the direction of the precious metal in the coming weeks.
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