Gold market overview for the week ending March 9: International gold prices experienced a rebound from lows but closed lower for the week. Chart patterns suggest potential bearish signals indicating a possible top formation. However, prices remained above the 5- and 10-week moving averages, maintaining a bullish technical outlook, with no significant strengthening of bearish momentum. Fundamentals continue to be broadly supportive, suggesting a primary upward trend remains in place.
In terms of price action, gold opened higher at the week's start at $5,332.23 per ounce, reaching a weekly high of $5,418.42 before forming a doji candlestick pattern suggesting a top. A sharp decline followed on Tuesday, erasing gains from the previous two weeks and touching a weekly low of $4,996.92. Prices subsequently found support and rebounded, fluctuating over the following days to close at $5,170.13 on Friday. The weekly trading range was $421.5, resulting in a weekly loss of $104.26, or 1.98%, from the previous week's close of $5,274.39.
Key drivers included a risk-off opening boost at the week's start due to escalating Middle East tensions, which quickly led to profit-taking. Prices weakened further after a U.S. court rejected a Trump administration request to delay tariff refunds. On Tuesday, concerns that prolonged Middle East conflict could exacerbate inflation fears spurred significant dollar strength. This pushed market expectations for the Federal Reserve's first rate cut from July back to September, pressuring gold into a sharp decline to the weekly low.
Subsequent support buying, combined with persistent geopolitical risks and ongoing inflation concerns, helped prices recover from lows. However, this rebound was capped and volatility persisted following U.S. economic data releases, including ADP employment and initial jobless claims.
By Friday, a surprisingly weak U.S. February non-farm payrolls report, which increased fears of an economic slowdown potentially forcing the Fed to reconsider rate cuts, along with heightened geopolitical risks due to a hardline stance from former President Trump, allowed bullish momentum to dominate, leading to a stronger rebound and a weekly close off the lows.
Outlook for Monday, March 9: International gold opened slightly higher but quickly reversed gains, turning negative and erasing Friday's advance. A massive surge in crude oil prices, which gapped up over 16%, intensified inflation worries. Concurrently, a strong opening for the U.S. dollar index put pressure on gold, triggering profit-taking. In the short term, gold faces the risk of further corrective declines. A prudent bullish approach would involve either waiting for a sustained break above $5,200 before entering long positions or looking for a rebound from support near the 60-day moving average. Until then, the bias is cautiously bearish.
This week's focus will be on U.S. February CPI data. Core CPI month-over-month and year-over-year figures are expected to show moderation, potentially boosting rate cut expectations and supporting gold. Other key data releases later in the week are also anticipated to be gold-positive. Therefore, the trading strategy for the week favors looking for a rebound following an initial decline and potential bottoming early on.
Fundamentally, high geopolitical risks persist with ongoing Middle East tensions. However, crude oil, a key protagonist in this situation, currently holds stronger safe-haven appeal than gold. Combined with inflation fears and a stronger dollar, gold faces short-term pressure from reduced attractiveness and profit-taking.
Historically, however, sustained strength in oil prices has either led to sideways consolidation or concurrent strength in gold. Directionally, oil and gold trends tend to align. While short-term inflation concerns may dampen expectations for immediate Fed easing, rising inflation also supports gold's value as a commodity, limiting downside pressure. Furthermore, persistent inflation could ultimately force more significant Fed rate cuts in the future. Therefore, any adjustment or decline in gold prices triggered by an oil price surge could present a buying opportunity for bullish positions.
Moreover, no major, sustained negative factors currently exist for gold. Last Friday's weak non-farm payrolls data actually enhanced rate cut prospects. Even if rising inflation delays or cancels near-term cuts, it sets the stage for potentially larger future cuts. Additionally, the People's Bank of China has increased its gold reserves for the 16th consecutive month, and geopolitical risk concerns are likely to eventually refocus on gold.
Should geopolitical tensions ease, it would reduce inflation fears and potentially increase rate cut expectations, still supporting gold prices. Regardless of short-term fundamental shifts, the overarching direction and long-term outlook for gold remains bullish. The price target for the year remains the $6,000 per ounce level, or higher.
Technically, on a monthly chart, February's shooting star candlestick indicated a potential top. The current bearish start to March suggests the first half of the year may see wide-ranging consolidation, with a potential renewed upward push towards $6,000 or even $7,500 in the second half. A sustained break and monthly close below $4,300 would signal a potential end to the bull market, targeting a decline towards $3,500 or even the $3,000 level.
On the weekly chart, last week's rejection from resistance, forming a bearish engulfing pattern and a shooting star, suggests potential weakness. This bearish signal is being followed through with early-week declines. Key support to watch for a potential bounce is the 10-week moving average, followed by the February opening price, which could also serve as a buying level.
On the daily chart, gold has faced consistent resistance at the 5- and 10-day moving averages, trading below them in a corrective pattern. Oscillators also maintain bearish signals, indicating short-term bearish dominance. Until prices can sustainably break and close above $5,200, the near-term bias is weak. Key support levels below are the $5,000 and $4,800 marks.
For intraday trading, specific entry and exit points should be based on real-time market analysis and individual account guidance. Preliminary intraday reference levels are as follows; exact entry/exit points depend on live market conditions: Gold: Support near $5,015 or $4,970; Resistance near $5,100 or $5,160. Silver: Support near $80.60 or $80.10; Resistance near $84.00 or $85.20.