Gold price (XAU/USD) remains steady during the European trading session, hovering around $2,913 on Wednesday. Investors await the United States (US) Consumer Price Index (CPI) data for February, which is expected to show a slowdown in inflation. However, concerns persist that the current US tariff strategy may contribute to inflationary pressures, influencing future readings.
Key Highlights for Gold Price:
- Gold holds at $2,913 as traders anticipate US CPI data release.
- Analysts predict a slowdown in monthly and yearly inflation figures.
- US tariff policies may lead to inflationary effects, impacting future CPI.
- China and Europe respond to US tariff policies with countermeasures.
- A ceasefire deal for Ukraine, brokered by the US, awaits Russia’s response.
Market Context: Rate Cut Speculations and Tariff Concerns
Chinese consumption stocks surged following the conclusion of China’s annual political gathering, which emphasized support for domestic demand. Hong Kong jewelers also benefited from increased haven demand for Gold proxies. Meanwhile, Wall Street remains cautious due to uncertainties surrounding US tariffs, persistent inflation, and the Federal Reserve’s (Fed) interest rate strategy.
JPMorgan Chase & Co. and RBC Capital Markets have adjusted their bullish market forecasts for 2025, citing potential economic slowdowns due to trade policies. According to the CME FedWatch Tool, there is a 97.0% probability that the Fed will maintain interest rates in its March 19 meeting, with a 39.5% chance of a rate cut in May.
Technical Analysis: Gold’s Next Move
Gold price remains resilient above the $2,900 level, reclaiming its position above the daily Pivot Point at $2,906. A break above the $2,930 resistance level could pave the way for a new all-time high. The next resistance levels to watch are:
- R1: $2,931 (converging with last week’s highs)
- R2: $2,947 (potential upside target)
- All-time high: $2,956
On the downside, key support levels include:
- S1: $2,890 (near-term support)
- S2: $2,864 (February 12 low, major downside protection)
Conclusion: Outlook for Gold Prices
Gold prices remain stable as markets await the US CPI release and assess geopolitical developments. The Fed’s rate decision, along with US trade policies, will play a crucial role in shaping market sentiment. Should inflation slow as expected, Gold could find renewed upside momentum. However, any escalation in trade tensions or geopolitical risks may further drive haven demand.
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