Key Points:
- XAUUSD (Gold) hovers near $2,872, set for its first weekly decline after eight straight gains.
- Stronger USD and Fed rate expectations weigh on gold, pushing it below key support while Trump confirmed tariffs on Canada, Mexico, and China for March 4, fueling uncertainty.
- Upcoming US PCE inflation data could impact Fed rate cut bets and gold’s next move.
- China’s gold imports hit a multi-year low, raising concerns about softening demand.
XAUUSD (Gold) is on track to snap an eight-week winning streak, trading near $2,872 per ounce after touching a session low of $2,867.78. The metal has declined nearly 2% this week, pressured by a stronger US dollar and profit-taking from recent highs.
Stronger Dollar and Tariff Uncertainty Weigh on Gold
The US dollar index (DXY) is set for a 0.6% weekly gain, making gold more expensive for foreign buyers. Meanwhile, Trump reaffirmed his plan to impose 25% tariffs on Mexican and Canadian goods starting March 4, alongside an additional 10% duty on Chinese imports. The uncertainty surrounding trade policy has heightened risk-off sentiment but failed to support bullion.
Technical Analysis
Image: XAUUSD slips to 2871.67, testing support near 2867.78–as seen on the VT Markets app.
XAUUSD fell 1.55%, closing at 2871.67 after opening at 2916.74. The session reached a high of 2885.08 and a low of 2871.13, with selling pressure dominating.
The moving averages (MA 5,10,30) confirm bearish sentiment as shorter-term MAs trend below the longer-term line. The MACD (12,26,9) remains in negative territory, with a slight uptick in histogram bars, indicating weakening downside momentum.
Key levels to watch include 2867.78 as support and 2920.83 as resistance. A recovery above resistance may signal bullish reversal, while failure to hold support could extend declines.
PCE Inflation Data Could Shift Fed Rate Cut Outlook
Investors are closely watching Friday’s PCE inflation data, the Fed’s preferred gauge of inflation. Recent weaker-than-expected US economic data has bolstered expectations of accelerated Fed rate cuts, which could provide some relief for gold if inflation cools.
Weaker Physical Demand Signals
Physical demand for gold remains under pressure, with China’s gold imports via Hong Kong falling 44.8% in January, the lowest level since April 2022. Meanwhile, Swiss data showed a 99% year-over-year drop in gold exports to China, signaling softening demand from the world’s largest consumer.
Market Outlook
XAUUSD remains bearish in the short term, with key support at $2,860. A break below this level could trigger further downside toward $2,850. On the upside, resistance is seen at $2,885, followed by $2,900. The US PCE data and Fed rate cut bets will be crucial for gold’s next move.
