- Gold's all-time high stands at $2,882.35, reached on Wednesday.
- Gold rebounds on Thursday, reversing earlier losses into gains.
- A sixth consecutive day of gains is possible if Gold secures another positive close.
Gold's price (XAU/USD) has erased earlier losses on Thursday, bouncing back and extending its February rally into a sixth consecutive day. The initial downturn was driven by comments from U.S. Treasury Secretary Scott Bessent, who emphasized that the Trump administration's focus is on lowering 10-year Treasury yields rather than the Federal Reserve's (Fed) benchmark short-term interest rate, according to Bloomberg.
Investors are closely watching the Bank of England's (BoE) latest monetary policy decision, which saw a 25-basis point (bps) interest rate cut to 4.50%, following a total reduction of 50 bps throughout 2024. Notably, two BoE policymakers supported a 50-bps cut, reinforcing expectations that the Federal Reserve might lower rates more aggressively than the market currently anticipates.
Additionally, Federal Reserve Governor Christopher Waller, San Francisco Fed President Mary Daly, and Dallas Fed President Lorie Logan are scheduled to speak later on Thursday, ahead of Friday's highly anticipated Nonfarm Payrolls report.
Daily Market Movers: Easing Risks and Commodity Strength
- Geopolitical Developments: U.S. President Donald Trump's remarks on Gaza and a potential new nuclear deal with Iran are easing market fears, leading some investors to reduce their Gold positions, according to Bloomberg. Trump is also expected to present a peace plan for Ukraine next week, which could further reduce geopolitical risk premiums.
- Commodity Market Rebound: Precious metals and agricultural commodities are leading a broader market recovery. The Bloomberg Commodity Total Return Index, tracking 24 energy, metals, and agricultural futures, has surged 5.9% this year, reaching its highest level since late 2022. That period was a boom year for raw materials as economies rebounded from COVID-19 disruptions and the war in Ukraine strained supply chains.
- Gold Market Dynamics: Gold in the Bank of England's vaults is trading at a discount compared to the broader market, as fears over potential Trump-imposed tariffs have triggered a rush for bullion, leading to weeks-long withdrawal delays, Reuters reports.
- Bank of England Policy Shift: As expected, the BoE implemented a 25-bps rate cut to 4.50%, with a 7-2 vote split favoring the move. Two members advocated for a larger 50-bps cut, reinforcing speculation that global central banks may accelerate rate reductions.
Technical Analysis: Gold Faces Resistance as Risk Appetite Grows
Despite Gold's intraday recovery, it has struggled to reach new highs. Market sentiment is shifting as President Trump's "peaceful" comments are fueling a risk-on environment, reducing demand for safe-haven assets like Gold. Selling pressure could persist unless a new catalyst emerges to reverse market expectations.
Support Levels:
- S1: $2,834 - First key support level
- S2: $2,820 - Secondary support
- S3: $2,790 - Previous high from October 31, 2024, acting as a strong support zone
Resistance Levels:
- R1: $2,886 - Slightly above Gold's all-time high
- R2: $2,905 - Key upside level to break if the rally resumes
Gold's near-term outlook hinges on market sentiment shifts, central bank policies, and upcoming U.S. economic data releases.
