{"id":103189,"date":"2025-03-04T15:12:39","date_gmt":"2025-03-04T13:12:39","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=103189"},"modified":"2025-03-04T15:12:40","modified_gmt":"2025-03-04T13:12:40","slug":"gold-outlook-gold-bulls-take-a-break","status":"publish","type":"post","link":"https:\/\/www.ironfx-cn.com\/fa\/gold-outlook-gold-bulls-take-a-break\/","title":{"rendered":"Gold Outlook: Gold bulls take a break"},"content":{"rendered":"

Since our last report<\/a>, gold bulls took a breather last week and today we are to take a look at the main fundamental issues, tantalizing its price action currently and in the coming week. For a rounder view we intend to conclude the report with a technical analysis of gold\u2019s daily chart<\/p>\n\n\n\n

Gold\u2019s negative correlation with USD in place<\/strong><\/h2>\n\n\n\n

Over the past five days, the negative correlation of the USD with gold\u2019s price seems to be in place. It\u2019s characteristic how the USD Index rose on Wednesday, Thursday and Friday, while gold\u2019s price dropped and vice versa, the USD Index rose on Monday while gold\u2019s price dropped. <\/p>\n\n\n\n

The observation of the movement of the two prementioned trading instruments highlights that the negative correlation is currently in place and could be maintained in the coming days. Yet we issue a warning for a possible decoupling of the two trading instruments should safe haven flows be so strong that affect both of them simultaneously. <\/p>\n\n\n\n

Furthermore, we also note that US bond yields continued falling over the past week, as the investors’ increasingly pessimistic sentiment about US economic outlook appears to be driving them lower. Our worries for the outlook of the US economy intensified after the release of the Atlanta Fed GDP yesterday.<\/p>\n\n\n\n

Which is forecasting a steep contraction of the US economy in Q1 25, of -2.8%, while the ISM manufacturing PMI figure for February yesterday also dropped. Please note that the ISM non-manufacturing PMI figure is to be released on Wednesday and may draw the markets attention.\u00a0 \u00a0<\/p>\n\n\n\n

Trump goes ahead with tariffs and the Ukraine minerals deal falls through<\/strong><\/h2>\n\n\n\n

Ona fundamental level, we note that the Trump administration, proceeded with the application of import tariffs of 25% on Canadian and Mexican products and additional 10% on Chinese products. <\/p>\n\n\n\n

This on\/off approach by Trump in imposing the tariffs, is understandably a bargaining chip, as the tariffs are being economically weaponized, yet tend to create substantial uncertainty regarding their possible effects on the US and global economic outlooks. <\/p>\n\n\n\n

We expect targeted countries to respond possibly in kind, or divert their exports from the US to other economies, while the US may expand the list of products or countries of origin to impose tariffs. The stakes are high about the issue and uncertainty about further developments are also high, which in turn could shake gold\u2019s price depending on whether we see further frictions building up.<\/p>\n\n\n\n

Sticking with Trump related issues, one cannot pass by the heated discussion in the oval office of the White House, between the Ukrainian President Zelenskyi and the US President and Vice President. <\/p>\n\n\n\n

The discussion resulted in the Ukrainian minerals deal not being signed, while the US has US suspends all military aid to Ukraine. The uncertainty about the issue is also high, hence should we see it intensifying, we may see gold\u2019s price getting some support and vice versa.<\/p>\n\n\n\n

US Financial releases ahead<\/strong> <\/h2>\n\n\n\n

Next Friday we highlight the release of the US employment report for February. Currently forecast, show an expected drop of the Non-Farm Payrolls (NFP) to rise to 160k if compared to January\u2019s 143k, the unemployment rate to remain unchanged at 4.0% and the average earnings growth rate to also remain unchanged at 4.1%yoy. <\/p>\n\n\n\n

Should the actual rates and figures meet their respective forecasts, we may see the rise of the NFP figure and the stability of the unemployment rate, exciting traders and thus providing some slight support for the USD, i.e. weighing on the gold\u2019s price. <\/p>\n\n\n\n

Yet the actual rates and figures seldomly meet their forecasts, a possible loosening US employment market may provide some support for gold\u2019s price while on the flip side a possible tightening US employment market could weigh on the precious metal\u2019s price. <\/p>\n\n\n\n

Given the importance of the release of February\u2019s US employment report, we also note the release of the ADP national employment figure for February on Wednesday which may be considered by some traders as a prelude for Friday\u2019s NFP figure<\/p>\n\n\n\n

Gold Technical Analysis<\/strong><\/h2>\n\n\n\n

XAUUSD 4H Chart<\/strong><\/strong><\/h3>\n\n\n\n
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