Gold prices opened at 2911.01 at the start of the week, partially recouping late February losses. Over the past five days, gold has been trading in a narrow range between 2929.90 and 2891.24, indicating a sideways market movement. After February, gold was supported by the growing uncertainty in the global economy caused by unpredictable actions of the administration of US President Donald Trump, as well as the weakening of the dollar.
Last week, the Trump administration imposed new 25% tariffs on imports from Mexico and Canada, as well as new tariffs on Chinese goods. Later, the President exempted from the tariffs a significant portion of imports from Mexico and a portion of imports from Canada for a month. Such change of plans increase uncertainty in the markets. On their background, fears about inflation and economic growth in the US increase.
The situation worsened when the president declined to comment on the risks of a US recession this year in an interview with Fox News on Sunday.
Meanwhile, Canada kept its retaliatory measures despite a partial easing from Washington. China, also hit by the new tariffs, prepares to announce its own countermeasures as early as Monday, which could further escalate trade tensions.
The next important event will be the publication of the US Consumer Price Index (CPI) data on March 12. The index is forecast to rise by 2.9% in annual terms in February and by 0.3% compared to January. Weaker data may point to a slowdown in inflation, which would weaken the dollar and probably push gold prices up. On the contrary, higher values will strengthen the dollar and exert pressure on gold. However, their impact will be limited as investors lower expectations for economic growth in the US.
Technical analysis says that gold has experienced a correction after oversold conditions at the end of February. On Monday morning, March 10, the RSI is in the neutral zone, without signals of a clear direction of movement. The Chaikin oscillator shows a decrease in the activity of buyers after March 6, although they still dominate the market. The MACD indicator shows a weakening of the bullish trend.
At the moment, gold is moving in a sideways range, waiting for new drivers to come out of consolidation.
Current recommendation:
Buy gold at the current price. Take profit – 3000. Stop loss – 2832.
This content is for informational purposes only and is not intended to be investing advice.
