On February 24, gold demonstrated a strong upward trend overall, breaking to new highs. After the Asian session opened, the price quickly surged, reaching near $5170 at one point. However, it subsequently fluctuated lower, finding effective support above $5120. Entering the European and American sessions, buying pressure reemerged, successfully pushing the price above the key $5200 level in the evening and touching a high near $5237. Although there was a slight pullback towards the session's close, gold ultimately settled around $5228, recording a solid bullish daily candlestick.
On Tuesday, February 24, markets were met not with a relaxation of tariff policies but with an environment of higher tariffs and greater uncertainty. By yesterday, hundreds of companies had filed lawsuits demanding refunds of previously paid substantial tariff amounts. Meanwhile, Bernd Lange, Chair of the European Parliament's International Trade Committee, announced a suspension of work related to approving the EU-US trade agreement, postponing a vote originally scheduled for the 24th. The renewed escalation of trade frictions served as the core driver behind yesterday's significant rally in gold.
In the early Asian session today, some long positions opted to take profits, causing the price to briefly fall below the $5200 level, dipping to around $5145. However, the decline did not trigger panic selling. Buyers quickly stepped in, allowing the price to stabilize and rebound, climbing back above $5180. This indicates that market willingness to buy on dips remains strong.
After all, the current market logic favoring safe-haven assets is far from over. Beyond the ongoing developments on tariffs, the risk of military conflict between the US and Iran is escalating at an unprecedented rate. The hardline stances from both sides are thickening the clouds of war over the Persian Gulf. Several analysts warn that any trigger event could lead to a new round of sharp price increases for gold. Against this backdrop, any short-term pullback may be viewed as an opportunity to re-enter the market.
From a technical perspective, while the current technical outlook for gold is not overwhelmingly positive, it should not be entirely disregarded in favor of blindly following fundamental news, as fundamentals are inherently difficult to predict and track. For the immediate session, gold is expected to see consolidation and digestion. Following this morning's decline and adjustment, market sentiment should have cooled somewhat, increasing the probability of a corrective phase for the day. Resistance above is focused around the $5200-$5020 area, while support below is watched around yesterday's pullback low of $5130-$5120. Considering the daily chart structure trend, the 5-day moving average near $5100 is even more critical. A break below this level would suggest that fundamental drivers might quieten for a while, potentially allowing the price action to revert to more conventional technical patterns.
In summary, a true bottom requires time and price action to confirm, necessitating the thorough liquidation of panic-driven positions and a rebalancing of bullish and bearish forces. Attempting to "buy the dip" too early in a decline is essentially trying to catch a falling knife. However, the absence of cascading stop-losses following a sharp drop, coupled with active buying interest, indicates strong underlying support on pullbacks and suggests the bullish consensus has not broken down. Therefore, the current situation leans more towards a phase of consolidation and adjustment. A significant rally in gold would likely require a trigger from the aforementioned geopolitical risks.
Hence, today's trading suggestions are: Gold: Consider short positions between $5190-$5192, with a stop loss at $5201, targeting $5130-$5100. Hold if the price breaks lower. If the price firmly reclaims the $5200 level, close shorts and consider long positions on a pullback, targeting $5250-$5280.
Key economic data and events to watch today, Tuesday, February 24: 22:00 US FHFA House Price Index MoM (December) 22:00 US S&P/Case-Shiller 20-City Composite Home Price Index YoY (December) 22:10 Speech by Fed Governor Waller 22:35 Speech by Fed Governor Cook 23:00 US Wholesale Inventories MoM (December) 23:00 US CB Consumer Confidence Index (February) 23:00 US Richmond Fed Manufacturing Index (February)
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