Zhang Yaoxi: Gold prices face resistance and take profits, but the positive outlook remains; pullbacks are still bullish

Zhang Yaoxi: Gold prices face resistance, take profits, but positive outlook still remains; retracements are still bullish

On the previous trading day, Tuesday (February 24): International gold encountered resistance and declined, affected by a strengthening dollar and profit-taking. Additionally, several Federal Reserve officials warned that inflation remains too high, significantly cooling expectations for rate cuts, which weighed on gold prices driven by safe-haven sentiment. The bullish momentum weakened, but recent trend patterns show a sideways upward movement. The recurring escalation of geopolitical tensions in the Middle East has become an important recent driver for the gold market. The prospect of rate cuts this year still exists, so the market faces resistance and retracement; reaching support levels presents buying opportunities.

Regarding specific movements, gold opened in Asia at $5,227.26 per ounce, hitting an intraday high of $5,249.43 before encountering resistance and retreating, dropping over $100. It then stabilized and rebounded, trading within the $5,160–$5,186 range. At the US market open, it dropped again to a daily low of $5,094.07, then bottomed out and rebounded but was hindered by intraday resistance, ultimately closing at $5,143.70. The daily range was $155.36, down $83.56, a 1.6% decline.

Looking ahead to Wednesday (February 25): International gold opened with support from moving averages, stabilizing somewhat. Meanwhile, the dollar index’s early rebound momentum slowed, providing some support. Therefore, in terms of trading strategy, support levels at the 5-day or 10-day moving averages remain good entry points for long positions.

Fundamentally, yesterday’s comments from Goolsbee suggested that rate cuts should not be considered until there is more evidence of inflation easing, maintaining an optimistic outlook for further rate cuts this year. Collins indicated that rates are likely to stay at current levels for some time. The diminished prospects for rate cuts have pressured gold bulls. However, the rate cut cycle has not ended; Federal Reserve former official Waller is set to succeed Powell as chair in May, and the Trump administration’s clear preference for low interest rates still leaves room for long-term rate cuts.

Additionally, the recurring escalation and easing of geopolitical tensions have been a long-term driver of the gold market for over a decade. The ongoing fluctuations continue to push gold prices higher in a volatile manner. The overall trend remains bullish.

Thus, short-term retracements and declines are influenced by temporary factors. In the first half of the year, geopolitical tensions, tariff concerns, and central bank buying will dominate, while the second half will be characterized by expectations of rate cuts. Multiple safe-haven factors and structural demand continue to provide solid support. Amid ongoing global uncertainties, gold remains a long-term safe-haven asset and trust anchor. The year is expected to see continued bullish momentum, with prices repeatedly reaching new highs.

Technically, on the monthly chart, gold in February continued the bearish reversal from January, dropping sharply. After breaking through and then turning support at the upward trendline from the beginning of the year, it rebounded and maintained within a new bullish phase. It also remains above the 5-month moving average, indicating that the bearish correction from January has run its course, and the new bullish outlook remains valid. The trend is expected to strengthen and rise further.

On the daily chart, gold faced resistance yesterday and declined, showing a bearish engulfing pattern with a top formation. However, it is currently trading above the upward trend channel and the middle band, so any retracement should be limited. Therefore, a pullback to support levels like moving averages can be viewed as a buying opportunity.

Gold: watch support at around $5,130 or $5,060; resistance at around $5,230 or $5,300; Silver: support at around $85.30 or $84.00; resistance at around $89.70 or $91.80; Note: Gold TD = (International gold price × exchange rate) / 31.1035

A $1 fluctuation in international gold prices roughly causes a $0.25 (theoretical) change in Gold TD. US futures gold price = London spot price × (1 + gold swap rate × days to expiry / 365) Follow me to make your gold trading ideas clearer! Review historical cause and effect, interpret current environment, and forecast future trends, adhering to bold predictions and cautious trading principles. – Zhang Yaoxi The above opinions and analysis represent only the author’s personal views, for reference only, not trading advice. Operate at your own risk. You decide your own money.