Gold retreats from recent highs

Higher inflation and the lower probability of the Fed cutting again in the first half of 2025 has put some pressure on gold despite sentiment overall remaining very strong in recent weeks. Meanwhile various other major central banks such as the European Central Bank and the Bank of England remain more dovish and demand for havens is high amid trade wars and a possible resurgence of geopolitical tension centred on the middle east.

Gold’s extremely strong uptrend since the start of the year needs to pause sooner or later, and with the price having been within striking distance of $3,000 before inflation this seems like as good a place as any for that to happen. Overbought conditions have dominated since the middle of last month although buying volume in February so far has been particularly high.

$2,900 doesn’t seem yet to be a very significant area but the price might find some support around the 20 SMA before any potential test of $2,800. That would mean quite a deep retracement which seems somewhat questionable in the circumstances of such positive sentiment and high demand. $2,850 could be a zone of strong demand depending on upcoming political news; under the current circumstances an immediate new high is unlikely.

This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.