Daily Price Outlook
Gold’s price (XAU/USD) surged to an intra-day high of $2,942 but struggled to maintain its gains, dropping to around $2,902. The decline is driven by shifting market sentiment and growing uncertainty over US monetary policy.
Investors are closely watching Federal Reserve Chair Jerome Powell’s testimony to lawmakers. Powell is expected to emphasize the strength of the US economy, suggesting that the Fed is in no rush to cut interest rates. This is bearish for Gold, as higher rates make non-yielding assets like Gold less attractive.
Besides this, former US President Donald Trump has imposed a 25% tariff on steel and aluminum imports for all countries. China has responded with quiet retaliatory tariffs but hasn’t taken aggressive action yet. Markets remain cautious, but with no major escalation, safe-haven demand for Gold is fading.
If Powell maintains a hawkish stance, Gold could see further downside. However, any unexpected geopolitical tensions or economic slowdown could still provide support.
Strong US Dollar and Delayed Fed Rate Cuts Weigh on Gold Prices
On the US front, the broad-based US Dollar continues to rise for the fourth straight session, reaching near 108.50. This strength comes as expectations for Federal Reserve (Fed) rate cuts are shifting.
However, the recent Reuters poll suggests that the Fed may delay cutting interest rates until the next quarter due to rising inflation concerns. Many analysts who previously expected a rate cut in March now anticipate it happening by June, though opinions remain divided.
On the data front, the latest US jobs report showed that Nonfarm Payrolls (NFP) increased by only 143,000 in January, far below December’s 307,000. However, the Unemployment Rate unexpectedly fell to 4% from 4.1%.
Initial Jobless Claims also rose to 219K, higher than expected, signaling some labor market weakness. Despite these mixed signals, Fed officials remain cautious about inflation, making them hesitant to cut rates too soon.
For Gold (XAU/USD), the strong US dollar and delayed rate-cut expectations are bearish factors. Higher interest rates make Gold less attractive compared to yield-bearing assets. If the Fed maintains a hawkish stance, Gold could face further downside pressure in the near term.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is currently trading at $2,866.29, down 0.02%, as investors assess the metal’s resilience amid shifting macroeconomic conditions. The precious metal remains in a consolidation phase, hovering near key support levels while facing resistance from recent highs.
From a technical perspective, gold’s pivot point at $2,906.72 serves as a crucial inflection level. A break above this level could reinforce bullish sentiment, leading to an upward push toward immediate resistance at $2,943.27. If momentum continues, gold could challenge $2,966.54, with a potential test of $2,990.75, marking a significant hurdle for further gains.
On the downside, immediate support sits at $2,882.03, followed by $2,859.72 and $2,833.82. A drop below $2,859.72 would signal a deeper correction, potentially exposing gold to a retest of the 50-day EMA at $2,839.99. A sustained breakdown under $2,833.82 could trigger additional selling pressure, shifting sentiment in favor of bears.
Traders should closely monitor gold’s reaction near the $2,906.72 pivot. A sustained break above this level favors continued gains, while a rejection could lead to further downside.
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