- Gold prices for Wednesday Asian session.
- Concerns of commercial war among investors will increase the flow of safe hulls and benefit from gold prices.
- Investors will offer new home sales and FedSpeak later on Wednesday.
The Gold price (XAU/USD) rebounds after hitting a one-week low in the previous session. Market uncertainty and persistent concerns over instability linked to US trade policies continue to bolster demand for the precious metal, known for its safe-haven appeal.
However, analysts suggest that the potential for higher tariffs has heightened inflation concerns at the Federal Reserve (Fed), which could lead the US central bank to maintain elevated interest rates for an extended period. This scenario could limit Gold’s upside potential, as higher interest rates diminish the attractiveness of non-yielding assets like gold.
Traders will closely watch the release of US New Home Sales data for January later on Wednesday. Additionally, scheduled speeches by Federal Reserve officials Raphael Bostic and Thomas Barkin could offer further insights into monetary policy. Looking ahead, the key focus will be on Friday’s US Personal Consumption Expenditures (PCE) Price Index for January, a crucial inflation gauge that may influence the Fed’s rate outlook.
Gold Price Rises Amid Ongoing Trade War Uncertainty
- Trump signed another Executive Order late Tuesday, signaling for the US Commerce Department to launch an official “probe” into Copper markets.
- Trump stated late Monday that tariffs on Canadian and Mexican imports were “on time and on schedule” despite efforts by the countries to beef up border security and halt the flow of fentanyl into the US ahead of a March 4 deadline, per Reuters,
- The US consumer confidence fell the most since August 2021, declining to 98.3 in February versus 105.3 prior, according to the Conference Board.
- Richmond Fed President Thomas Barkin said late Tuesday that he will follow a wait-and-see approach regarding central bank interest rate policy until it is clear inflation is returning to the Fed’s 2% goal.
- Dallas Fed President Lorie Logan stated that it would be appropriate in the medium term for the Fed to buy more shorter-term securities than longer-term ones so that its portfolio can more quickly mirror the composition of Treasury issuance, per Bloomberg.
Gold Price Maintains Bullish Momentum Amid Short-Term Consolidation
Gold prices continue to inch higher, though they remain confined within a tight trading range in the near term. Despite this consolidation, the broader bullish outlook stays intact, as the metal trades above the 100-day Exponential Moving Average (EMA). Additionally, the 14-day Relative Strength Index (RSI) remains above the midline at 64.0, signaling that the upward trajectory is still the favored direction.
On the upside, $2,957, the all-time high, presents a major resistance level for buyers. A break above this level could trigger a further rally toward $2,980, aligning with the upper Bollinger Band, and potentially extending toward the psychological barrier at $3,000.
Conversely, support is initially found at $2,888, the February 25 low. If selling pressure intensifies, the next downside target could be $2,795, marking the lower Bollinger Band limit. A more significant decline could bring focus to $2,718, near the 100-day EMA, which serves as a crucial support level.
