Gold price analysis holding steady near $2,910 as of Wednesday. This comes after a 1.3% drop on Tuesday, caused by weak US consumer confidence data and new tariff threats from the Trump administration. Despite the dip, US bond yields have fallen sharply, with markets now expecting a 25 basis points (bps) rate cut by the Federal Reserve in June. This could help gold prices recover and find a bottom.
Traders are also watching two key events: the start of new tariffs on Mexico and Canada on March 4 and the release of the Fed’s preferred inflation measure, the Personal Consumption Expenditures Price Index (PCE), on Friday. These events could create more market volatility, so investors are staying cautious.
Gold Price Analysis: What’s Driving Gold Prices?
- Weak US Data: Poor economic reports have raised hopes for a Fed rate cut, which is good for gold.
- Tariff Threats: President Trump’s trade policies are making investors nervous, increasing demand for safe-haven assets like gold.
- Rate Cut Odds: According to the CME FedWatch Tool, there’s now a 66.2% chance of a rate cut in June, up from 33.8% earlier.
Expert Warning: Be Careful with Gold
Lee Baker, a financial advisor and member of CNBC’s Advisor Council, warns that gold prices might be too high right now. In a Bloomberg article, he said that when investors rush to buy gold out of greed, it often leads to a big price drop later.
Technical Analysis: Where Could Gold Go Next?
Gold price analysis is currently trading below its daily Pivot Point, which is a key level traders watch. This suggests prices could fall further. The Relative Strength Index (RSI) on the 4-hour chart also shows there’s room for more downside. If the market turns negative again, gold could drop to $2,880.
Key Levels to Watch:
- Upside: If gold recovers, the first target is the daily Pivot Point at 2,918. Beyond that, resistance levels are at 2,918. Beyond that, resistance levels are at 2,948 and the all-time high of $2,956.
- Downside: If prices fall, they could retest Tuesday’s low of 2,890. Further support levels are at 2,890. Further support levels are at 2,882 and $2,878 (February 17 low).
Conclusion: What Should Investors Do?
Gold is getting support from weak US data and trade tensions, but technical indicators suggest caution. Traders should keep an eye on key price levels and upcoming events like the PCE report and new tariffs. For the latest updates on gold prices and market trends, visit Daily Gold Signal.
For more detailed analysis, check out the Daily Gold Update.
