Gold Soars Amid Dollar Weakness and Geopolitical Tensions

Gold gained sharply on board-based US dollar selling. It hit a low of  $2833 and is currently trading around $2923.

Geopolitical Factors:

The bitter February 28, 2025, session between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskyy, where Trump and Vice President Vance complained about Zelenskyy's gratitude and approach to the Russian war, heightened risk aversion in global markets. Military aid and diplomacy were the issues, with Trump ranting over Zelenskyy's supposed lack of interest in peace, given continuing U.S. support.

Economic Data

The Institute for Supply Management (ISM) Manufacturing Purchasing Managers' Index (PMI) for February 2025 registered at 50.3, signaling a marginal expansion within the U.S. manufacturing sector for the second consecutive month. This figure is slightly below the projected value of 50.6 and represents a modest decrease from the January reading of 50.9.

Rate Pause Hopes Fade

According to the CME Fed Watch tool, the chances of a rate pause in Mar 19th 2025 meeting have decreased to 89% up from 96% a week ago.

Technical Analysis: Key Levels and Trading Strategy

Gold prices are holding above short-term moving averages 34 EMA and 55 EMA and above long-term moving averages (200 EMA) in the 4-hour chart. Immediate support is at $2895 and a break below this level will drag the yellow metal to $2867/$2850/$2830/$2800/$2770/$2740. The near-term resistance is at $2930, with potential price targets at $2940/$2957/$3000. It is good to buy on dips around $2880 with a stop-loss at $2850 for a target price of $3000.