📉Precious metals are under pressure of profit-taking after recent rally
Gold is down more than 1.5% today, largely due to profit-taking after the strong gains seen in recent weeks. At the same time, US bonds are gaining value, showing that the market is no longer concerned about too much pressure to maintain the Fed's hawkish policy. Higher inflation expectations were balanced by a decline in consumer sentiment and uncertainty about the state of the US economy.
- The monthly decline in CB sentiment in February was the largest since November 2021. Although annual inflation expectations rose from 5.2% to 6%, they were mainly driven by concerns about increased tariff pressure in international trade.
- President Trump said that tariffs on Canadian and Mexican imports will be implemented "on time and on schedule," despite expectations that such a scenario will be avoided before the March 4 deadline. However, it is still unclear whether the tariffs will go into effect or whether the emphasis on this is just another negotiating technique by the new US administration.
- Trump's talks with French President Macron and other European leaders may give hope that the Old Continent will not share the fate of Mexico or Canada, even if 25% tariffs come into effect. US trade advisor Navarro, when asked about tariff policy, called Germany an 'ally'.
- The comments of Mexican President Sheinbaum indicate that the matter will finally be clear by the end of next Tuesday (March 4). For investors, the potential postponement or reduction of tariffs on Mexico and Canada may mean a decrease in the momentum for further increases in gold prices, which were largely growing due to record deliveries, draining physical supplies in London, to New York - out of fear of tariffs on the EU and Great Britain. Above all, however, a more lenient approach to tariffs on Europe may support a correction in gold prices.
Large speculators on the gold market according to CoT data cut net long positions by 13,605 contracts to 201,962 in the week ended February 18. The SPDR Gold Trust holdings rose to 904.38 metric tons on Friday, a record high since August 2023.
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Despite the significant declines in today's session, gold's technical picture remains bullish. The 50- and 100-day EMAs (blue and purple lines on the chart) remain key support points, which have previously supported gold prices. Source: xStation
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