On Monday, February 17, it was noted that the U.S. CPI data released last Friday came in lower than expected, offsetting the impact of strong non-farm payroll figures. This led to a slight increase in market expectations for a Federal Reserve rate cut in June, providing short-term support for gold. However, technical indicators suggested that the rebound in gold faced resistance, with key support identified at $4,965 and resistance levels at $5,046 and $5,100.
In subsequent trading, gold stabilized after falling to $4,965 and rebounded, reaching $5,017 during European hours before encountering resistance. The price then fluctuated lower, finding support at $4,969 during U.S. trading hours and testing $4,997 before the close. On Tuesday, gold attempted to breach the $5,000 level but retreated, breaking below the $4,965 support and dropping sharply by over $40 to $4,922 before stabilizing. It is currently trading around $4,959. Overall, gold's rebound has been capped, with short-term momentum leaning toward consolidation amid high-level volatility.
Analysis indicates that while the lower-than-expected U.S. CPI data has boosted expectations for a June rate cut, gold's upward movement remains constrained. A rebound in the U.S. dollar has partially neutralized the supportive effect of rate cut expectations. Additionally, easing geopolitical tensions—including upcoming closed-door talks between Russia and Ukraine, as well as indirect negotiations between the U.S. and Iran—are exerting short-term pressure on gold. Reduced market liquidity due to the U.S. holiday and the ongoing Chinese Lunar New Year holiday has also contributed to subdued trading activity.
On the daily chart, gold has shown signs of consolidation after failing to sustain its rebound, maintaining a high-level range. Key support levels include the intraday low of $4,922, followed by the psychological $4,900 level, which aligns with the lower Bollinger Band on the 4-hour chart. Resistance is seen near $4,967, corresponding to the weekly MA5, which was breached during Tuesday's decline. Further resistance lies at $5,000, near the daily Bollinger Band midline and the 4-hour Bollinger Band midline. A break above this level could open the way toward $5,046, where gold faced repeated resistance last Friday and near Monday’s high.
Technical indicators, including a turning 5-day MA, a bearish MACD crossover, and declining KDJ and RSI readings, suggest that gold may undergo a period of adjustment following its failed rebound.
Trading Outlook: Reduced liquidity during the holiday period has led to range-bound gold movement, while short-term geopolitical easing adds downward pressure. A consolidation strategy is recommended, with support at $4,922 and $4,900, and resistance monitored at $4,967. A sustained break above this level could see further tests at $5,000 and $5,046.