Gold price fails to break through the $3,000 mark! After falling below $2,900, gold stabilizes
Gold prices stabilized after recording the largest single-day drop in two months, with spot gold slightly rising to $2,886.23 per ounce. Investors are concerned that the recent rise in gold prices may be excessive, leading to a drop below $2,900. The market is focused on the Federal Reserve's interest rate trends and Trump's tariff threats, with retail sales experiencing the largest decline in nearly two years, prompting traders to re-bet on a Fed rate cut. Despite the drop in gold prices, it has still risen for the seventh consecutive week, marking the longest streak of gains since 2020
The Zhitong Finance APP noted that gold prices stabilized after recording the largest single-day drop in two months, driven by investors' concerns that the recent record rise in gold prices may be excessive.
As of the time of writing, spot gold rose slightly by 0.1% to $2,886.23 per ounce, following a 0.8% increase the previous week. The Bloomberg Dollar Spot Index remained steady. Silver fell, while palladium and platinum rose.
The 14-day Relative Strength Index (a measure of the speed and strength of price movements) indicated that gold reached overbought levels earlier this week. Traders have also been analyzing the Federal Reserve's interest rate trends and the market turmoil risks caused by U.S. President Trump's tariff threats.
Increasing speculation suggests that Trump primarily uses these threats as negotiation tools. The tariff policies of the Trump administration have become increasingly chaotic due to delays and exclusions, and geopolitical and economic uncertainties often enhance gold's appeal as a safe-haven asset.
A report last Friday showed that retail sales experienced the largest decline in nearly two years, and traders were also examining the latest U.S. economic data for clues on the potential easing policy path the Federal Reserve might take. This data prompted traders to re-bet that the Federal Reserve would cut interest rates before September. Lower borrowing costs are generally favorable for gold, as it does not pay interest.
According to the latest report released by the U.S. Commodity Futures Trading Commission on Friday, as of the week ending February 11, fund managers' bullish bets on gold fell to the lowest level in four weeks.
Despite the drop in gold prices on Friday, gold has still risen for the seventh consecutive week, marking the longest streak of gains since 2020. Part of the reason is the continued purchasing of gold by central banks, including China, and the increase in holdings of gold-backed exchange-traded funds. Last Tuesday, gold prices reached an all-time high of $2,942.68 per ounce