Gold Daily | Gold Drops Nearly $20 as Strong Dollar and US Trade Concerns Weigh on Market Sentiment

【Latest Gold Price and Recent Trends】

Gold prices experienced a significant sell-off on Friday, closing down nearly $20 to $2857.45 per ounce amid concerns over US trade policies and a strong dollar index reaching a 10-day high of 107.66.

【Technical Analysis】

Gold prices continued their decline, breaking the support level of $2890 per ounce, driven by a rising dollar. With further potential declines, the next support levels are identified at $2832 and $2800 per ounce. The resistance levels to watch are $2900 and $2956 per ounce.

【Market Sentiment and Economic Background】

Concerns over US President Trump's trade tariffs on Mexico and Canada led to market uncertainty, boosting the dollar. The Fed's cautious stance on further rate cuts, despite inflation data meeting expectations, helped maintain the dollar's strength. Wall Street's main indices opened lower due to concerns over Trump's policies. The PCE inflation data in January matched expectations, suggesting the Fed may maintain current rates, with market predictions indicating a potential rate cut in June.

【Analyst Opinions】

Analysts note profit-taking and a strong dollar as primary influences on the gold market. Despite a weekly drop of 2.7%—the largest since November—analysts like Peter Grant highlight that the stock market's decline has intensified de-leveraging pressures on gold. Jim Wyckoff mentioned that ongoing profit-taking and a strong dollar index significantly impacted the markets this week. Daniel Ghali from TD Securities indicated that the PCE data hasn't changed Fed expectations significantly, thus not heavily influencing gold prices. Nitesh Shah from WisdomTree noted that the geopolitical risks and potential trade wars could provide further support for gold, despite short-term volatility.