- Weak US data and Trump’s tariff threats fuel expectations of a Federal Reserve rate cut, increasing haven demand for Gold.
- Gold price stabilizes, consolidating previous losses while seeking support on Wednesday.
- Market sentiment improves, attempting to recover from Tuesday’s decline, which could support Gold prices.
Gold (XAU/USD) holds steady around $2,910 on Wednesday after a sharp 1.3% drop in the previous session, triggered by weak US consumer confidence data and renewed tariff threats from President Trump's administration.
Meanwhile, US Treasury yields have plunged, with markets increasingly pricing in a 25 basis point rate cut from the Federal Reserve (Fed) in June. This shift supports Gold and could help stabilize its price action.
Market Movers: March Events in Focus
- Weak US economic data has fueled expectations of a Fed rate cut, while Trump’s tariff threats have increased demand for safe-haven assets like Gold.
- Bloomberg analysis warns that Gold's elevated levels could lead to a harsh correction, as investors continue buying at any cost.
- The CME FedWatch Tool shows a 66.2% probability of a June rate cut, up from 33.8% for no change, reflecting growing market expectations.
Technical Analysis: Gold Faces Resistance Below Pivot Point
Gold remains below its daily Pivot Point of $2,918, suggesting a risk of further downside. The Relative Strength Index (RSI) on the 4-hour chart signals room for further losses, potentially dragging Gold to $2,880 if selling pressure intensifies.
A recovery above $2,918 could push Gold toward $2,948 (R1 resistance) and the all-time high of $2,956.
A retest of Tuesday’s low at $2,890 is likely, with S1 support at $2,882 and further downside potential toward $2,878 (February 17 low).
Traders remain cautious ahead of March 4, when tariffs on Mexico and Canada take effect, and the Fed’s PCE inflation report on Friday, which could influence the central bank’s monetary policy outlook.
