Daily Price Outlook
Gold price (XAU/USD) climbed to around $2,930 as investors turned to safe-haven assets amid increasing economic uncertainty in the US.
This is because Former President Donald Trump’s push for higher tariffs has raised fears of inflation, driving gold demand. On the flip side, the analysts warn that persistent inflation concerns may force the US Federal Reserve (Fed) to keep interest rates higher, limiting gold's upside.
Traders are closely monitoring key economic data, including the US New Home Sales report for January, which could provide insights into the housing market.
Moreover, the speeches from Fed officials Raphael Bostic and Thomas Barkin could signal future monetary policy shifts. On Friday, the US Personal Consumption Expenditures (PCE) Price Index for January, the Fed’s preferred inflation measure, is expected to influence gold price trends.
US Dollar Weakens Amid Trade Policies, Fed’s Cautious Stance, and Economic Uncertainty
On the US front, the broad-based US dollar faced mild bearish pressure due to evolving trade policies and economic concerns.
Notably, Trump confirmed that tariffs on Canadian and Mexican imports would proceed as planned, despite both countries enhancing border security efforts ahead of the March 4 deadline.
Meanwhile, the weak US consumer confidence data added to the dollar’s woes, with February’s reading dropping from 105.3 to 98.3, marking the steepest decline since August 2021.
Thus, the declining consumer confidence indicates increased economic caution among Americans, further supporting gold’s safe-haven appeal.
On the other hand, the global market sentiment remains sluggish as the Fed maintains a cautious stance on monetary policy.
Richmond Fed President Thomas Barkin highlighted a "wait-and-see" approach, signaling that interest rate cuts are unlikely until inflation is firmly under control.
Whereas, Dallas Fed President Lorie Logan suggested the Fed might shift towards shorter-term securities in its bond-buying strategy, potentially impacting Treasury yields and gold prices.
Hence, the ongoing trade tensions, inflation worries, and economic uncertainties also keeping the gold in demand.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,911.71, down 0.01%, reflecting cautious sentiment as it hovers below the pivot point at $2,925.36. The price is also trading under the 50 EMA at $2,925.93, reinforcing short-term bearish momentum.
If the price remains below this pivot, the next target is immediate support at $2,888.73, with a deeper decline towards $2,864.18. A further drop could test $2,834.62, signaling a continuation of the bearish trend.
On the upside, a break above the pivot at $2,925.36 would shift sentiment to bullish, targeting immediate resistance at $2,955.49.
A stronger breakout could push prices towards $2,980.42, with an extended rally reaching $3,005.91 if buying momentum sustains. However, given the current bearish bias and downward pressure from the 50 EMA, the path of least resistance remains to the downside.
The technical outlook suggests a cautious sell below the pivot of $2,925, with an entry targeting $2,888 and a stop loss at $2,947. This setup offers a favorable risk-reward ratio, aligning with the short-term bearish sentiment.
Traders should watch for volume confirmation and price action around the pivot point to validate the bearish momentum before committing to short positions.
Conversely, if the price breaks above $2,925.36 with significant buying volume, it would invalidate the bearish setup and open the path for a potential bullish reversal.
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