Gold Market Recap (Week of February 24): International gold prices extended their rebound from the previous week's lows, closing higher once again. The price action met the projected extension targets as anticipated. Bullish momentum remains steady, supported by favorable fundamentals and a positive technical outlook, suggesting potential for another test of historical highs.
In terms of price movement, gold opened the week at $5106.96 per ounce and strengthened. Although prices retreated on Tuesday, erasing gains and hitting a weekly low of $5094.07, they subsequently found support and rebounded consecutively. Bullish momentum accelerated on Friday, pushing prices higher to a weekly peak of $5278.28. The metal ultimately settled at $5277.15, marking a weekly trading range of $184.21 and a gain of $170.19, or 3.33%.
Influencing factors: While comments from several Federal Reserve officials on Tuesday, warning that inflation remains too high and significantly dampening rate cut expectations, offset Monday's gains which were driven by safe-haven demand following an announcement of temporary tariff increases to 15%; underlying support from physical buying, alongside dovish-leaning remarks from the Fed and escalating uncertainties in U.S.-Iran geopolitical tensions, provided fresh impetus. On Friday, comments expressing dissatisfaction with Iran negotiations, highlighting a stalemate in nuclear talks, raised the prospect of potential U.S. military action against Iran, bolstering gold prices further.
Outlook for Monday, March 2nd: International gold opened significantly higher by $94.50, reaching $5371.65 per ounce, driven by escalated Middle East tensions over the weekend boosting safe-haven demand. Prices subsequently pared some gains due to profit-taking but remained above last week's closing level. Further upward movement is expected during the day.
However, the U.S. dollar index also opened stronger and is biased for short-term continuation of its rebound, which may cap the pace of gold's advance. Furthermore, the substantial gap higher at the open suggests a potential need for a pullback to fill that gap. Therefore, near-term pullback risks should be monitored. Nonetheless, the overall directional bias remains bullish. On one hand, while the dollar index rebounds short-term, it still faces resistance from its broader downtrend on weekly and monthly charts, with underlying pressure for rate cuts within the year remaining. On the other hand, rhetoric suggesting potential military action against Iran could persist for weeks, indicating that safe-haven sentiment is unlikely to abate quickly. Consequently, the primary outlook for this month remains bullish.
Today's focus will be on economic data including the U.S. S&P Global Manufacturing PMI final reading for February and the ISM Manufacturing PMI. Market expectations lean towards results that would be favorable for gold prices.
Additionally, this week brings key releases such as the February Non-Farm Payrolls report, January Retail Sales data, and the latest U.S. manufacturing and services indicators. Overall expectations largely point towards outcomes supportive for gold. Combined with the prevailing geopolitical risk premium, the weekly bias remains strongly bullish.
Conversely, any optimistic developments in negotiations might only cause a temporary pullback, with the overall bullish trend expected to remain intact.
Should the Non-Farm Payrolls data meet or fall below expectations, it would likely strengthen the case for imminent rate cuts, providing another boost for gold. Even if data surprises to the upside, it is unlikely to alter the expectation for rate cuts within the year. Thus, from a short-term perspective, any pullbacks triggered by negative news, especially if they reach support levels, are viewed as buying opportunities.
From a fundamental perspective, geopolitical tensions have been a persistent, long-term uncertainty for decades. Temporary de-escalation rarely leads to a trend reversal; instead, such tensions often act as stepping stones propelling gold prices higher.
Furthermore, markets still anticipate two Fed rate cuts this year. Comments regarding potential tariff rate increases from 10% to 15% or higher on goods from certain countries indicate that the repricing of inflation and growth expectations due to trade policies is far from over.
On the demand side, SPDR Gold Trust holdings data showed that as of February 25th, holdings in the world's largest gold ETF increased to 1097.62 tonnes, a rise of 3.43 tonnes from the previous day, reaching the highest level since February 2021. This accumulation signal strongly reflects institutional confidence in gold's long-term value.
In summary, within the context of an anticipated Fed easing cycle, further complicated by tariff concerns and geopolitical避险worries, gold's bull market prospects remain firmly intact. The current consolidation phase appears more like a period of accumulation, building energy for the next catalyst. Gold still possesses the potential to challenge levels above $6000 per ounce.
Technically, on a monthly chart, after February's decline following January's bearish shooting star pattern, gold found support near the breached ascending trendline (now acting as support) from early this year and rebounded. It remains within a new bullish cycle and above the 5-month moving average, suggesting the bearish momentum from January has been exhausted. The fresh bullish outlook remains valid, with prices expected to strengthen further above this trend support and aim for new highs.
On the weekly chart, gold continued its advance last week, holding firmly above the 5 and 10-week moving averages. Bollinger Bands are expanding upwards, and auxiliary indicators maintain bullish signals, painting an optimistic picture. A sustained move above the $5300 level would open the door for a retest of historical highs and potentially new record levels.
On the daily chart, strengthened bullish momentum on Friday kept prices above the short-term 5 and 10-day moving averages. Auxiliary indicators are in the early stages of a bullish signal, and the main chart's Bollinger Bands suggest upward expansion. Short-term momentum favors further gains. This week's gap higher open aligns with this expectation. While a pullback to fill the gap is possible, it would be considered a buying opportunity, especially given the absence of significant near-term bearish pressure. Therefore, the intraday trading bias remains predominantly long.
For specific real-time trading guidance, please refer to live account information.
Preliminary intraday trading level references are provided below. Exact entry/exit points should be confirmed via live account notifications: Gold: Support levels to watch are around $5305 or $5250; Resistance levels are around $5415 or $5455. Silver: Support levels to watch are around $93.75 or $92.50; Resistance levels are around $98.50 or $100.00.
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