Daily Price Outlook
During the European trading session, gold (XAU/USD) lost its bullish momentum and declined to around $2,900, failing to hold near its all-time high of $2,956.
However, the major factor behind this drop was the delay in the implementation of US car tariffs, which improved investor sentiment and reduced safe-haven demand for gold.
Despite some easing in tariffs for Canada and Mexico, the reciprocal trade measures are still set to take effect in April, keeping market uncertainty alive.
This has led to continued safe-haven demand for gold, though the latest developments have capped further gains.
Apart from this, investors are keeping their eyes on the European Central Bank (ECB) interest rate decision, where markets anticipate a 25-basis-point cut.
Meanwhile, European Union leaders are set to discuss a defense spending package and potential further aid to Ukraine, which could influence broader market sentiment.
Weaker US Data and Fed Rate Cut Bets Boost Gold Prices
On the US front, the broad-based US dollar is losing its traction amid slowing economic momentum. This can be witnessed by the weaker US economic data.
The ADP Employment Change report for February showed just 77K new jobs, significantly below the forecast of 140K and January’s 186K, raising concerns about a slowing labor market.
Moreover, the US ISM Manufacturing PMI came in at 50.3, slightly under the expected 50.5 and January’s 50.9, signaling weakening economic activity.
However, S&P Global’s final Manufacturing PMI for February exceeded expectations at 52.7, providing a slight relief. These developments have fueled expectations of multiple Federal Reserve rate cuts in 2025 as the economy shows signs of softening.
Investors are now awaiting Friday’s US Nonfarm Payrolls (NFP) report, which is projected to show a modest recovery in job growth to 160K in February, up from January’s 143K. Any disappointment in the data could further support Fed rate cut bets, potentially influencing gold prices.
Hence, the weaker US economic data and rising Fed rate cut expectations support gold prices by weakening the US dollar and lowering bond yields. Moving on, the disappointing NFP report could further boost gold’s appeal as a safe-haven asset.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,921.65, reflecting a cautious but steady bullish bias. The metal remains above its pivot point of $2,907.49, signaling that buyers are maintaining control. The 50-day EMA at $2,905.09 continues to act as a dynamic support level, reinforcing the ongoing uptrend.
Immediate resistance is seen at $2,939.51, a level that gold has struggled to break in recent sessions. If buyers push through this barrier, further gains toward $2,956.29 and $2,970.29 could be on the horizon.
A confirmed breakout above these resistance levels may accelerate momentum, targeting fresh highs as traders assess market sentiment.
On the downside, immediate support is at $2,884.56, with additional safety nets at $2,863.79 and $2,844.79. A break below $2,907.49 would weaken the bullish outlook and shift momentum in favor of sellers, increasing the risk of a pullback toward these support levels.
From a broader perspective, gold remains supported by expectations of a Federal Reserve rate cut and trade-related uncertainties.
Market participants are closely monitoring economic data releases, particularly labor market indicators, which could influence Fed policy expectations.A weaker U.S. dollar and softer job data could provide additional fuel for gold’s next leg higher.
For now, traders should watch for confirmation above $2,939.51 to validate continued upside momentum. Failing to hold above $2,907.49 could signal renewed selling pressure, exposing gold to a deeper correction.
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