Gold Technical Analysis March 4, 2025
In the past few hours, gold prices have experienced slight fluctuations as investors exercise caution ahead of impending U.S. tariffs. This analysis delves into the current price levels, technical indicators, support and resistance levels, fundamental factors, and provides a conclusion for traders.
Current Price Levels and Technical Indicators:
As of the latest data, spot gold is trading at approximately $2,892.00 per ounce, reflecting a minor decrease of 0.1%. The 21-day Simple Moving Average (SMA) is positioned around $2,900, serving as a critical level that gold prices are currently struggling to surpass. The Relative Strength Index (RSI) remains above the midline, indicating a neutral to slightly bullish momentum. Additionally, the Moving Average Convergence Divergence (MACD) histogram shows a flat pattern, suggesting a lack of strong directional bias in the immediate term.
Support and Resistance Levels:
Immediate Support: $2,868.80 – This level corresponds to the 23.6% Fibonacci retracement from the rise between $2,583.75 and $2,956.90.
Secondary Support: $2,830.00 – A previous support zone that could be revisited if bearish momentum intensifies.
Immediate Resistance: $2,900.00 – Aligns with the 21-day SMA and poses a psychological barrier for traders.
Secondary Resistance: $2,956.90 – The recent high, and a breach above this could signal a continuation of the bullish trend.
Fundamental Factors:
The slight easing in gold prices is primarily attributed to investor caution ahead of U.S. President Donald Trump’s announcement of new tariffs on imports from Canada, Mexico, and China. The proposed tariffs include a 25% duty on Mexican and Canadian imports and an increase to 20% on Chinese goods. In retaliation, China has imposed additional tariffs of 10%-15% on U.S. imports and introduced new export restrictions. While such tariffs are generally viewed as inflationary, potentially enhancing gold’s appeal as a hedge, there are concerns that higher inflation could lead to prolonged periods of elevated Federal Reserve interest rates, diminishing gold’s attractiveness. Investors are also awaiting key economic data releases, such as the ADP employment report and the U.S. non-farm payrolls report, for further insights into the Federal Reserve’s monetary policy trajectory.
Conclusion:
Gold prices are currently navigating a tight range, influenced by geopolitical developments and upcoming economic data releases. The struggle to decisively move above the $2,900 mark suggests a cautious market sentiment. Traders should closely monitor the support and resistance levels mentioned above, as movements beyond these thresholds could signal potential trading opportunities. Staying informed about geopolitical events and economic indicators remains crucial for anticipating future price movements in the gold market.