Spot gold was on a "roller coaster", falling below the $2,900 mark before the U.S. market, falling to a low of $2,890.75, and then quickly recovered some of its losses and returned to above $2,910. As of now, the gold price is 2,919.09.
Trump: It is expected that a 25% tariff will be imposed on the European Union soon, covering automobiles and other goods; the European Union said it would respond immediately and firmly to the U.S. tariffs; Trump's statements on the timing of the implementation of tariffs on Mexico and Canada are contradictory.
The U.S. Senate voted to confirm Jamison Greer as U.S. Trade Representative.
Ukrainian Prime Minister: The government approved the signing of a mineral framework agreement with the United States, which includes 6 important positions; Zelensky: The main purpose is to personally hear that the US aid to Ukraine will not stop. According to the mineral agreement, Ukraine does not have to repay the US for the aid it has provided. Trump said that he would not provide security guarantees for Ukraine in the agreement to end the conflict, but Europe would do so.
Spot gold fell to a low of $2,891 on Wednesday, testing the support level near the 20-day moving average, which is currently at $2,888. Subsequently, the price of gold rebounded during the session and returned to near the opening price. However, the price of gold has been consolidating near the highs in the past few weeks, and the bullish momentum has weakened. The price of gold is at risk of breaking the key trend support represented by the 20-day moving average and the rising trend line since the beginning of the year. But the 20-day moving average still provides important dynamic support.
Since December last year, gold prices have accelerated upward in an ascending trend channel, showing a potential upward angle of the larger bull trend pattern. Therefore, the gain or loss of the lower track of the ascending channel or the 50-day moving average will be a decisive signal whether the trend will reverse. It is worth noting that the relative strength indicator (RSI) on the daily chart has shown a bearish divergence, trending down after a period of time in the overbought area.
Since breaking through the 20-day and 50-day moving averages at the end of December last year, gold prices have not seen a pullback to test these two moving averages, but tested the 20-day moving average this week. If the subsequent 20-day line fails to hold, the 50-day line will become a potential target for bears. However, in addition to the 50-day moving average, other price levels that may provide support include the previous trend high of $2,790 and $2,726. If the price falls to the latter, indicating that the 50-day moving average has failed to hold, the gold trend is likely to turn bearish and open the possibility of testing lower trend indicators, namely the 200-day moving average at $2,579 and the rising trend line near it.
Support from weak economy. Investors have turned to gold as a safe-haven asset due to concerns that US President Trump's tariff plan may lead to inflation, forcing the Federal Reserve to maintain high interest rates. Analysts believe that inflationary pressures may limit the Fed's flexibility in adjusting monetary policy, further supporting gold prices.
According to data from the World Federation of Conference Boards, US consumer confidence fell sharply from 105.3 in February to 98.3, the largest drop since August 2021, which exacerbated market uneasiness. The decline reflects the growing caution of US consumers, which may weaken economic growth and increase demand for safe-haven assets such as gold. The market is still waiting for the US PCE price index for January, which will be released on Friday and is the inflation indicator favored by the Federal Reserve. This report may affect the market's expectations of the Federal Reserve's future interest rate decisions, which will have an impact on gold prices.
From a technical perspective, gold prices are still below $2,922.70, which has turned into a key resistance level, indicating short-term bearish pressure. If prices cannot effectively break through, the first target of shorts will be the key support level below $2,888.61, and then $2,864.54. However, if it can break through $2,922.70, market sentiment will turn bullish, which may push prices to $2,956.68. However, the path of least resistance at present is more inclined to bearish.
On Wednesday, gold was still fluctuating back and forth, and was in a stage of continued running-in and consolidation. The market has been quite bullish recently, and the pullback now may be to eliminate some excess bubbles, which does make sense. I think that the decline can be viewed as a potential buying opportunity. This is especially true at the 2900 mark.
But again, there will be some support at $2850 and $2800, and I don't think there is any reason to short gold. It's just a matter of time before it gets some momentum to push to around $3000. This is a major psychological level that many people will pay close attention to. Although yesterday's close was very ugly, I won't read too much into it.
Daniel Ghali, senior commodity strategist at TD Securities, said that no matter what the dollar does, gold still has a unique advantage, while silver is suffering from severe supply constraints. Previously, despite rising unemployment rates in U.S. bonds and a stronger dollar, gold continued to maintain an impressive surge. The strength of the dollar has been enough to catalyze buying of gold as a hedge against currency debasement, especially outside of Asia, a trend that has been active over the past two years and more intense since January 2025.
There are significant distortions in commodity markets, especially in the physical movement of gold between London and the United States. Returns on physical gold moves have been unusually large over the past few months, however, this trend in gold is now showing signs of easing, although silver and other precious metals remain affected. This is rare, but as long as it lasts, it will create a strong backdrop for gold.