?? Gold Market Outlook February 25, 2025

?? Gold Market Outlook February 25, 2025

?? Gold Reaches New Highs Amid Import Tax Concerns, but Beware of Profit-Taking

Gold touched a historic high of $2,956.15 per ounce in today's trading before adjusting downward to move within the $2,930-$2,950 range during the afternoon session. The precious metal has been bolstered by concerns regarding President Donald Trump's import tax plans and purchasing activity from leading gold ETF funds.

The U.S. policy to impose a 25% import tax on steel and aluminum has created uncertainty in the commodities market, prompting investors to rapidly shift their portfolios toward safe-haven assets like gold. Demand in the COMEX futures market has increased by 12% this week, reflecting concerns about inflationary impacts and the risk of a potential trade war.

Meanwhile, the Dollar Index (DXY) strengthened by 0.6% today to 106.8 points, following a 2% depreciation since mid-January. Dollar appreciation typically puts pressure on gold prices, but in the current situation, trade concerns and the flight to safety appear to be more influential factors.

Another significant supporting factor is the increase in assets held by SPDR Gold Trust, the world's largest gold ETF, which rose to 904.38 tons last Friday—the highest level since August 2023. This reflects growing interest from institutional investors. Gold prices have increased by more than 12% in 2025, and these high holding levels help prevent the price from falling too sharply.

Investors are adjusting their expectations regarding the Federal Reserve's monetary policy, anticipating that the Fed will wait until the next quarter before cutting interest rates again, according to a Reuters economist survey. This differs from earlier expectations that predicted a rate cut in March. Maintaining high interest rates may increase the opportunity cost of holding gold, which provides no yield in the form of interest.

This week, investors will be watching the FOMC Minutes release on Wednesday and the U.S. Personal Consumption Expenditures report on Friday, which is an inflation indicator that the Fed prioritizes. Additionally, speeches by at least 9 Federal Reserve officials this week are expected to emphasize a cautious stance regarding further interest rate cuts.

Nevertheless, analysts from Jim Wyckoff at Kitco Metals stated, "Investors believe that in the coming weeks or months, or perhaps longer, gold prices will continue to rise," adding that "the path of least resistance for gold remains sideways to higher, and as long as uncertainty persists, gold is likely to continue its upward adjustment."

Technical Analysis Using Multi-Time Frame Perspective

Daily Timeframe

- The main trend remains bullish, with Moving Averages (20, 50, 200 days) aligned in a pattern supporting the uptrend

- Price is above the upper Bollinger Band at $2,925, indicating an overbought condition

- RSI is in the overbought zone at 75+, suggesting the possibility of a correction

4-Hour Timeframe (H4)

- Price is testing the lower boundary of the Ascending Channel at $2,920

- MACD shows negative Divergence, indicating weakening bullish momentum

- Key support levels are at $2,920 and $2,900

1-Hour Timeframe (H1)

- Price is moving in a Descending Triangle pattern, which is typically a consolidation pattern

- Stochastic Oscillator shows early signs of oversold conditions in the short term

- Key resistance levels are at $2,940 and $2,956

15-Minute Timeframe (M15)

- Price is testing the 50 MA support at $2,930

- Trading patterns show increased volatility in the short term

- Trading volume is decreasing during the downward adjustment, indicating this may be just a temporary consolidation

5-Minute Timeframe (M5)

- A Double Bottom pattern has formed at $2,928, indicating potential short-term buying pressure returning

- RSI begins to show oversold signals, indicating opportunities for a short-term recovery

?? Trading Recommendations

Short-Term Trading (Scalping)

Wait & See: With increased volatility and conflicting signals across different timeframes, it's recommended that short-term investors wait for clearer price direction before making trading decisions, especially awaiting the results from the FOMC Minutes on Wednesday.

If trading is necessary:

- Buy: When price firmly holds above $2,940, set Stop Loss at $2,932 and target at $2,950

- Sell: When price breaks below $2,920, set Stop Loss at $2,928 and target at $2,910

Daily Trading (Day Trade)

Wait & See: Market conditions remain highly uncertain due to external factors that could severely impact price direction. It's advisable to wait for clearer signals from both fundamental and technical indicators.

If the situation becomes clearer:

- Buy Strategy: Consider buying when price tests key support at $2,900-$2,910, setting Stop Loss at $2,880 and targets at $2,950-$2,960

- Sell Strategy: Wait for confirmation of a break below the key support at $2,900 with high trading volume before considering a Short position, setting Stop Loss at $2,920 and targets at $2,870-$2,880

?? Support and Resistance Levels

XAUUSD

Status: Slightly Bullish

Resistance 3: $3,000

Resistance 2: $2,975

Resistance 1: $2,956

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Support 1: $2,920

Support 2: $2,900

Support 3: $2,882

Despite short-term consolidation, the primary trend remains bullish with supporting fundamentals. However, caution is advised regarding profit-taking and potential increased volatility from economic data releases and new policy announcements.

In such highly uncertain market conditions, a Wait & See strategy may be the most appropriate option for most investors, waiting for clear signals before making trading decisions, or considering reducing position sizes to manage risk.