XAU/USD Price Update: Gold Sees Pullback as Investors Weigh Economic Data

XAU/USD

Prediction: Correction

Gold remains in a long-term uptrend but is currently undergoing a correction after reaching a record high of $2,942.70. The price is now trading around $2,886 after a 1.6% drop on Friday, marking the largest decline since December 2024. The price pullback from the peak reflects profit-taking pressure, as gold had entered overbought territory (RSI previously exceeded 70).

However, gold has maintained its seven-week winning streak, indicating that the uptrend remains intact.

FUNDAMENTAL ANALYSIS

Monetary Policy & Fed Impact:

U.S. retail sales data, released on Friday, showed the sharpest decline in nearly two years, increasing expectations that the Fed might cut interest rates in September.

However, inflation remains a key concern, which could lead the Fed to keep interest rates elevated for longer than anticipated, limiting gold's upside potential.

Impact of U.S. Trade Policy:

Former President Trump continues to push for tariff measures, including auto tariffs set to take effect on April 2. This could heighten economic uncertainty, boosting safe-haven demand for gold.

Investors are closely watching trade negotiations, with expectations that tariffs might serve as a bargaining tool for the Trump administration.

Market Sentiment & Capital Flows:

CFTC data shows that hedge funds reduced their net long positions in gold to the lowest level in four weeks as of February 11, indicating institutional investor caution.

However, central bank demand, particularly from China, remains strong, providing long-term support for gold prices.

TECHNICAL ANALYSIS

Key Resistance Levels

● $2,942.70 – Record high; if the price retests and breaks this level, it could target $2,960.

● $2,908.25 – Closest resistance; if gold rebounds above this level, it may resume its upward momentum.

Key Support Levels

● $2,881.95 – Current support; holding above this level could set the stage for a recovery.

● $2,850.55 – Stronger support, aligning with the 89-H4 EMA; a break below this level could trigger deeper downside pressure.

● $2,785.93 – Major support zone, aligning with the 200-H4 EMA.

RSI (Current: 45.6): RSI has fallen from overbought levels to a neutral range, indicating a correction but no signs of being oversold yet.

Trading Volume: Increased significantly during the price drop, indicating strong selling pressure but no clear trend reversal yet.

Price Action:

● If gold holds above $2,881, traders may look for buying opportunities targeting $2,908 – $2,942.

● If gold breaks below $2,881, watch for lower support levels to determine safer entry points.

Gold is undergoing a short-term correction but remains in a broader uptrend. Investors should closely monitor U.S. trade policies and economic data to assess the next directional move.

BTC/USD

Prediction: Sideways Movement

Bitcoin remains in an accumulation phase within a narrow range, fluctuating between $96,000 and $98,500. While the long-term trend remains bullish, BTC is currently facing selling pressure at key resistance levels in the short term. Investors should closely watch price action around support and resistance levels to determine the next move.

FUNDAMENTAL ANALYSIS

Market Sentiment & Long-Term Trend

BTC continues to trade within a tight range over the weekend, indicating uncertainty from both buyers and sellers as they wait for a new catalyst.

While short-term price action remains unclear, analysts maintain a bullish long-term outlook. However, altcoin season remains uncertain as the pace of new token launches accelerates. According to CoinGecko, 600,000 new tokens were created in January 2025 alone, compared to an average of 50,000 tokens/month during 2022-2023.

Monetary Policy & Fed Impact

The Federal Reserve (Fed) has maintained a cautious stance on interest rate cuts for 2025. Fed Chair Jerome Powell emphasized that there is no urgency to lower interest rates, especially as recent inflation data remains higher than expected.

January 2025 CPI report showed inflation at 3%, exceeding the 2.9% forecast, dampening hopes for an early monetary policy easing.

As a result, Bitcoin briefly dropped below $95,000 following the report. According to the CME FedWatch Tool, only 3% of investors expect a 25 bps rate cut in the March 2025 meeting.

Higher interest rates reduce capital inflows into risk assets like crypto, limiting Bitcoin’s upside
potential.

Bitcoin Price Outlook

Bitcoin is currently stuck within the $95,000 - $98,000 range, with key resistance at $102,000.

If BTC fails to break above $102,000, it risks a pullback to $91,800 or even $76,000 if selling pressure intensifies.

On the upside, BTC must break $108,400 on the daily and weekly charts to regain bullish momentum and target new all-time highs.

Investors should monitor Fed policy decisions and upcoming inflation data to gauge Bitcoin’s next direction.

TECHNICAL ANALYSIS

Key Resistance Levels

● $97,766 – Closest resistance, aligned with the EMA 89.

● $99,198 – Stronger resistance, aligned with EMA 200; if BTC fails to break above, the downtrend may continue.

● $102,216 – Major resistance zone; BTC previously failed to break above this level during the last rally.

Key Support Levels

● $95,000 – Current support; holding above this level could trigger a short-term rebound.

● $92,095 – Next support level; a break below could signal deeper downside.

● $88,756 – Strong support and critical bottom to watch.

EMA: EMA 34 and EMA 89 are crossing below EMA 200, suggesting a bearish trend remains dominant. BTC is currently struggling against EMA 200; failure to break above could lead to further downside pressure.

RSI: RSI is at 42.40, indicating neutral conditions—not yet oversold but lacking strong bullish momentum. If RSI drops toward 30, the probability of BTC breaking below $95,000 increases.

Bitcoin is trading within a narrow consolidation range and needs a catalyst to break out of the $95,000 - $98,500 zone. While the long-term trend remains bullish, in the short term, BTC must overcome key resistance levels to confirm an uptrend continuation. Investors should closely watch Fed policies, inflation data, and key technical levels to anticipate the next move.

US30 (Dow Jones Industrial Average)

Prediction: Uptrend, but Momentum is Slowing

The Dow Jones Index (US30) remains in an uptrend, but momentum is weakening as price struggles near the 45,066 resistance zone. Currently, US30 is fluctuating around 44,566, indicating that the market is reassessing risks related to U.S. tariff policies and weaker economic data.

FUNDAMENTAL ANALYSIS

Monetary Policy & Fed Impact

U.S. 10-year Treasury yields dropped to 4.48%, reflecting expectations that the Fed might ease policy later this year.

FedWatch data shows a 51.3% probability of at least a 25bps rate cut in June, up from 40.3% in the previous session—suggesting that rate cut expectations are gradually returning.

However, Fed Chair Jerome Powell has reiterated that there is no rush to cut rates, with a high probability of keeping policy unchanged for at least the next three meetings.

This cautious Fed stance could put short-term pressure on equities.

U.S. Economic Growth & Data

Retail sales fell by 0.9% in January, the sharpest decline since March 2023, signaling that consumer spending is slowing due to inflationary pressures and tax policy uncertainties. Industrial production dropped by 0.1% (vs. expected +0.1%), largely due to weakness in the automotive sector.

Although manufacturing output exceeded expectations, concerns remain that tariff policies could disrupt supply chains, impacting businesses in the long term.

Trade Policy & Geopolitical Risks

Former President Donald Trump signed a directive to develop reciprocal tariffs against all trading partners, raising fears of a global trade war.

Trump also warned that BRICS nations could face U.S. tariffs if they implement a common currency, further escalating trade tensions.

Investors are awaiting developments from the Munich Security Conference, but so far, discussions between the U.S., EU, and Ukraine have yielded no breakthroughs.

Market Sentiment & Stock Performance

● Dow Jones fell 0.37% to 44,546.08, reflecting investor caution over tariff risks.

● Nasdaq rose 0.41% to 20,026.77, led by tech stocks.

● S&P 500 remained flat, closing at 6,114.63.

Stock Highlights:

● Airbnb (ABNB) surged nearly 15%, leading gains in Nasdaq and S&P 500.

● GoDaddy (GDDY) plunged 14%, experiencing the worst decline of the day.

TECHNICAL ANALYSIS

Key Resistance Levels

● 45,066 - 45,100 → Major resistance; a breakout could extend the rally to 45,500.

● 44,900 - 45,000 → Short-term resistance zone currently being tested.

Key Support Levels

● 44,400 → Nearest support; as long as price holds above this level, the uptrend remains
intact.

● 43,334 → Next key support, previously a strong resistance zone.

● 42,521 → Stronger support; a deeper correction could attract buying interest here.

● 41,762 → Major support, aligned with EMA 200; a dip to this level could create a long-term buying opportunity.

RSI: RSI at 56 → Still in bullish territory, but momentum is fading. RSI previously approached overbought conditions (70) but is now cooling down, suggesting a potential consolidation or short-term pullback before the next move higher.

US30 remains in an uptrend, but momentum is weakening as it faces resistance near 45,066. The Fed’s cautious stance, weaker U.S. economic data, and growing trade tensions could keep markets volatile. Investors should closely monitor Fed policy updates, economic reports, and geopolitical developments for further direction.

 

 

 

 

 

 

 

 

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