Zhang Yaoxi: Tariffs and ongoing geopolitical risks remain, and the outlook for gold prices continues to be bullish.

Zhang Yaoxi: Continued geopolitical risks from tariffs and the outlook for gold prices remain bullish

On the previous trading day, Wednesday (February 25): International gold prices initially rose then retraced, closing with a bullish line, but failed to hold steady and recover Tuesday’s decline. This indicates that the short-term trend still faces oscillation and downward adjustment needs. However, there are many support levels below, and the overall trend is gradually moving higher in oscillation. Therefore, if a correction occurs and prices dip, touching support at various moving averages, it remains primarily a bullish outlook.

Specifically, the gold price opened in Asia at $5,143.28 per ounce, with an intraday low of $5,120.96, then rebounded and continued to fluctuate. After reaching an intraday high of $5,217.39 following the US session, it dipped again toward the close, ending at $5,165.06. The daily range was $96.43, with a net gain of $21.78, a 0.42% increase.

The influence came from technical support buying, tensions ahead of Iran’s next nuclear negotiations, and ongoing US military build-up, all supporting gold and silver prices. However, the prospect of the US maintaining unchanged short-term interest rates could pose resistance to gold. Additionally, as risk appetite improves and stock markets rise, the demand for safe-haven assets diminishes. US Treasury yields continue to rise, limiting bullish momentum in gold, leading to a retreat at the close.

Looking ahead to Thursday (February 26): International gold opened stronger, supported by the 5-day moving average and ongoing US trade policy uncertainties. US Trade Representative Grier indicated that the US will announce tariffs at 15%, and tariffs will continue to be implemented, providing support for gold prices.

Thus, amid inflationary pressures from US tariffs and geopolitical tensions before Iran’s nuclear talks, gold remains predominantly bullish. Overall, given policymakers’ concerns over persistent US inflation, markets widely expect the Federal Reserve to keep rates steady until at least June. The federal funds futures market projects only about 53 basis points of rate cuts this year, roughly two 25-basis-point cuts, with the first possibly in July or September. This indicates that a rate-cut cycle is still underway, just a matter of timing, keeping gold in a bullish phase.

Additionally, PDR Gold ETF holdings as of February 25 increased to 1,097.62 tons, up 3.43 tons from the previous day, reaching a new high since February 2021. This accumulation signals strong institutional confidence in gold’s long-term value.

Therefore, this year’s gold market is in a window where tariffs, inflation, and Iran’s nuclear crisis intertwine. Short-term, spring may see consolidation, but any declines or adjustments will likely be quickly offset by uncertainties. Amid ongoing global uncertainties, gold’s role as a safe haven and trust anchor remains prominent. Gold prices are expected to continue a bullish trend this year. Over the next year, with the Fed’s easing policies, a relatively weak dollar, and persistent geopolitical risks, gold could challenge the $6,000 level.

Technically, on the monthly chart, gold in February continued the downward reversal from January’s inverted hammer, but after breaking through and then retesting the upward trend resistance turned support at the start of the year, it rebounded and stayed within a new bullish phase. It remains above the 5-month moving average, indicating that the January correction is over, and the new bullish outlook remains valid. The trend is expected to strengthen further.

On the daily chart, bullish momentum has weakened today but remains above the 5-day moving average, with multiple support levels below. The technical indicators also lean bullish, suggesting a higher probability of continued strength. Therefore, trading should focus on buying dips, with support at various moving averages indicating potential for further gains.

Gold: Support levels around $5,130 or $5,080; resistance levels near $5,230 or $5,300.
Silver: Support levels around $87.30 or $85.00; resistance levels near $91.40 or $92.70.
Note:
Gold TD = (International gold price × exchange rate) / 31.1035
A $1 fluctuation in international gold prices roughly causes a 0.25 yuan change in Gold TD (theoretical).
US futures gold price = London spot price × (1 + gold swap rate × futures days to expiry / 365)
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The above opinions and analyses are solely the author’s personal views, for reference only, not trading advice. Operate at your own risk.
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