Gold held above $5,045 an ounce on Wednesday and traded near a two-week high. The quotes are supported by expectations of a softer policy from the Federal Reserve.
Growth intensified following weak US economic data. Retail sales were below forecasts in December, pointing to a slowdown in consumer activity and stoking fears of a cooling economy.
The market is now pricing in a higher likelihood of three Fed rate cuts this year than it was two weeks ago.
Investors now await the release of US data on employment and inflation, which may provide additional signals on the state of the economy and the regulator's next steps.
Demand from central banks remains strong. The People's Bank of China increased its reserves in January for the 15th consecutive month.
Geopolitical risks are an additional factor supporting prices. Markets remain attentive to tensions between the United States and Iran despite the positive start to talks last week.
Technical analysis
The H4 chart shows that after a sharp collapse in early February from the 5550-5600 area to lows around 4400, gold has entered a recovery phase. The price has stabilized around 5000-5050 and is trading near the middle line of the Bollinger Bands. The bands are gradually narrowing, indicating a decrease in volatility and the formation of a consolidation after strong price swings.
In graph H1, the structure is more neutral. Quotes move within a narrow range from 5000 to 5080. The upper limit acts as local resistance, while the lower limit acts as support. The market seems balanced, with attempts at a constant advance, but without pronounced momentum.
Conclusion
In summary, gold's rally to a two-week high primarily reflects the shift in market expectations toward a more dovish Federal Reserve, amplified by recent weak US retail trade data. While technical indicators show stabilization and consolidation within a recovery phase, the price action remains range-bound and lacks decisive momentum. The near-term path will depend critically on new US inflation and employment data, which will either validate the current moderate price revision or call it into question. Sustained central bank buying and unresolved geopolitical tensions provide a structural floor, but to overcome the current consolidation, gold requires a clear catalyst from upcoming macroeconomic releases.
By RoboForex Analysis Department
Disclaimer
Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
