Gold prices (XAU/USD) remain in a narrow trading range near the $2,900 mark at the start of the week, as traders await key economic updates. The market’s attention is largely focused on recent comments from U.S. President Donald Trump, who discussed the state of the U.S. economy in an interview with Fox News over the weekend. Trump described the economy as being in a “transition” phase, a remark that comes amid growing concerns that the U.S. could be entering a recession.
Additionally, Federal Reserve Chairman Jerome Powell made notable comments on Friday before the beginning of the Fed’s blackout period, which precedes the policy rate decision set for March 19. Powell stated that the central bank does not need to take action at this time and emphasized the risks of making premature adjustments to interest rates. His remarks suggested that maintaining the current rate policy is a prudent move to avoid potential policy mistakes.
Key Market Movers: Focus on Economic Uncertainty and Rate Decisions
President Trump’s comments on the U.S. economy, particularly his focus on tariffs and federal job cuts, continue to weigh on market sentiment. Powell’s acknowledgment of rising economic uncertainties in the U.S. also kept investors on edge. The latest data from the Atlanta Fed’s GDP gauge indicated a potential contraction in the U.S. economy this quarter, further fueling concerns.
The Federal Reserve’s next policy meeting, scheduled for March 19, is expected to maintain the current policy rate, with the CME Fedwatch Tool indicating a 97% chance of no rate change. However, the likelihood of an interest rate cut by the Fed’s June 18 meeting has risen to 81.8%, according to market forecasts. Lower borrowing costs are typically seen as supportive for gold, which may benefit from potential rate cuts.
Technical Outlook: Gold Faces Crucial Support and Resistance Levels
As the market settles into a cautious phase, gold is experiencing a pullback after recent price movements. A further retreat in gold prices could provide a buying opportunity for bulls, especially if President Trump refrains from introducing new tariffs. A pullback could see gold testing key support levels, including the daily S2 support near $2,878.
At the time of writing, gold is trading near $2,905, with immediate resistance at the daily Pivot Point of $2,912 and the daily R1 resistance at $2,927. If gold continues to see inflows, it may face additional resistance at the daily R2 level of $2,945, just below the all-time high of $2,956 reached on February 24.
On the downside, the $2,900 mark provides psychological support, reinforced by the S1 support at $2,893. For bulls, it is crucial that these support levels hold to avoid a further decline. If these levels fail, the next key support is at the daily S2 level of $2,878, which may prevent further downward pressure.
Conclusion
Gold prices remain in a tight range as markets digest economic uncertainty, comments from President Trump, and the Fed’s stance on interest rates. With the Fed unlikely to make immediate changes to policy, and the potential for rate cuts later this year, gold could see support. However, the precious metal faces important technical levels in the near term, and investors will be closely monitoring these key support and resistance zones for further direction.