Gold (XAU/USD) Retreats from Fresh All-time Highs, Bulls Remain In Control

Gold is nearing the $3000/oz mark, potentially reaching it briefly before a pullback.

Concerns about the stock market and a murky Fed outlook are driving investors towards gold.

Key economic data releases this week include US GDP and PCE data.

Risk aversion persisted in the markets today, as the end of February draws to a close. The risk aversion tone is a result of the ongoing uncertainty of US trade and tariff policy.

President Trump agreed to suspend tariffs for one month on Canada and Mexico in exchange for certain concessions. Will the tariffs be delayed again and scrapped entirely, is the question on the minds of market participants?

Golds Impressive 2025 – More to Come?

The Gold price rally in 2025 has also coincided with a weaker US Dollar.

Is the gold rally exhausted or will a touch of $3000/oz occur this week? That is the pertinent question this week, as $3000/oz remains a possibility.

By Friday, gold had climbed for the eighth week in a row, marking its best streak since 2020, which saw nine straight weeks of gains. While this could indicate the rally is losing steam, gold is so close to the $3,000 mark that it’s likely to at least touch that level briefly before pulling back.

Will Gold Outperform Stocks in 2025?

There is a growing belief that Gold prices may outperform stocks in 2025 as market concerns keep the metal elevated. Excluding the uncertainties around tariffs, central banks are another piece of the puzzle, with the Fed outlook in particular seeming murky.

Concerns around the stock market being overvalued and with retailers concerned about performance moving forward, this is becoming a real possibility.

Source: LSEG, Isabelnet

Data for the Rest of the week

Traders will keep an eye on the US GDP report for the fourth quarter of 2024, due later this week. Recent signs of a slowdown in the US economy, like Friday’s weaker Services PMI data, have added to the interest in this report.

There are also a host of Federal Reserve policymakers who will be speaking this week. The biggest event though from my point of view will be the Feds Preferred inflation gauge, the PCE data release on Friday.

Given the recent uptick in inflation, Fed Chair Powell urged caution about reading too much into the data. He mentioned that the Fed prefers the PCE data and thus making this data release a massive one.

Technical Analysis – Gold (XAU/USD)

Gold saw a pullback in Asian trade before bulls took control once more, propelling the precious metal to fresh all-time highs around 2956.

This move was met by significant selling pressure pushing price back down to 2930. Is this a sign of waning bullish momentum?

That is the question as the huge psychological $3000/oz handle lies in wait.

Bulls remain firmly in control at present with a break of 2956 opening up a test of 2975 on route to 3000.

I still think the 3000 handle will be hit, but the precious metal may struggle to find acceptance above this level at the first time of asking.

When we compare the current 8-week gold rally to the 9-week rally in 2020, the current one shows stronger momentum. Back in 2020, the rally ended with a bearish hammer indicating a pullback, but last week, gold closed near its highs.

Unless we see a clear reason to sell, like a drop in the stock market, gold might still hit $3,000 briefly. However, $3,000 is a significant level, and many might take profits quickly if it gets there.

Gold (XAU/USD) Daily Chart, February 24, 2025

Source: TradingView (click to enlarge)

Support

2930,2900,2882

Resistance

2956,2975,3000

Source: ACTIONFOREX