Gold price prediction today: Will gold prices continue their uptrend?
Gold price prediction today: Gold prices may continue to rise if the US dollar weakness persists, says Praveen Singh, Senior Fundamental Research Analyst- Currencies and Commodities at Mirae Asset Sharekhan:Gold Performance:
- In the week ending February 20, spot gold closed with a weekly gain of nearly 1.2% at $5104 on a weaker US Dollar and Middle East geopolitical risks.
The metal was up by around 2.1% on Friday.
- Gold extended its gain on February 23 on a weaker US Dollar as tariff uncertainty clouds the near-term outlook of the US economy.
- At the time of writing, gold was trading with a gain of 1.50% at $5182.
MCX Gold April at Rs 160,342 was up by 2.21%.
SCOTUS ruling:
- On February 20, in a momentous decision, the Supreme Court of the US (SCOTUS) ruled by a 6-3 margin that the president Trump exceeded his authority in imposing a raft of tariffs last year.
The SCOTTUS ruled that the International Emergency Economic Powers Act (IEEPA) didn’t explicitly authorize such measures.
- Following the ruling, the president said that he’ll impose a new global 15% tariff under Section 122 of the 1974 Trade Act and start investigations with a view to impose more levies using different authorities.
The new tariff regime will come into effect from February 24.
- Some of the questions concerning tariffs are unresolved though.
For example – whether the White House can replace the tariffs using other legal tools or if it can keep on using so-called emergencies to justify expansive executive action.
The EU, concerned with uncertainty creeping into the previously struck US-EU deal, has called the US to honour the deal as it is not clear whether the newly imposed 15% tariffs will supersede the deal.
Data roundup:
- The US data released on Monday were somewhat encouraging: Chicago Fed Nat Index (January), durable goods ex transport and factory orders ex transport (both December) were slightly better-than-expected.
Germany’s headline Ifo business climate index rose to 88.60 Vs the estimate of 88.30 as the German economy seems to be benefitting on increased government spending.
- The annualized 4Q advance USD GDP data, released on Friday, came in at 1.4% Vs the estimate of 2.8%– significantly lower than the 4.4% annualized GDP growth in Q3—as the US economy lost around 1% on reduced government spending due to the shutdown.
The 4Q advance GDP Price Index at 3.6% was much-hotter-than the expected 2.8%.
The PCE Price Index, the Fed’s preferred gauge of inflation, was generally hotter-than-expected.
The Core PCE Price Index in December was up by 3% y-o-y (forecast 2.9%), while the Index rose by 0.4% m-o-m (prior 0.3%, estimate 0.2%).
Headline PCE Price Index stood at 2.9% (forecast 2.8%, prior 2.8%).
University of Michigan Sentiment Index at 56.6 trailed the initial reading of 57.30, while one-year and 5-10-year inflation expectations eased slightly to 3.4% (prior 3.5%, forecast 3.5%) and 3.3% (prior 3.4%, forecast 3.4%) respectively.
- Eurozone’s and UK’s composite PMIs data were positive.
- Japan’s nationwide CPI inflation cooled down 1.5% y-o-y, the coolest pace in almost five years.
Geopolitics:
- The US-Iran tensions continue to be the primary driver of gold prices.
The third round of nuclear talks is scheduled on February 26 in Geneva.
Iran maintains the stance that it is open to strike a deal should the US ease sanctions.
Meanwhile, Trump is keeping all his options, including a strike on Iran, open.
ETF holdings and COMEX inventory:
- As of February 20, total known global gold ETF holdings stood at 100.16 MOz, up by around 1.20 MOz YTD.
- Registered COMEX gold inventory at 17.17 MOz is at the lowest level since September 2024.
CFTC data:
- In the week ending February 17, money managers increased their bullish gold bets by 3,019 net-long positions to 96,057 – the most bullish position in three weeks.
Long-only positions rose 4,157 lots to 120,314, while short-only positions rose 1,138 lots to 24,257– the highest in 12 weeks.
US Dollar and yields:
- At the time of writing, ten-year US yields were down by 3.5 bps to 4.05%, while 2-year yields had eased by 1.5bps to 3.46%.
- The US Dollar Index edged 0.20% lower to 97.60.
Earlier, the Index closed with a loss of 0.13% at 97.80 on Friday and was up by around 0.90% for the week.
In the week ending February 20, ten-year US yields were up by around 1% for the week, while 2-year US yields were up by around 2%.
Fedspeak:
- The Federal Reserve Governor Waller said that he will support a 25-bps rate cut at the upcoming March 17-18 meeting should the labour market weaken.
He added that stripping out the effects of tariffs, US inflation is close to the Fed’s target of 2%.
As the January nonfarm payroll report was decent, revisions to the figures will be closely monitored by traders.
Upcoming data:
- Major US data on the deck this week include weekly ADP employment change, Conference Board Consumer Confidence (Feb.
24) and January PPI (Feb.
27).
Focus will be on Fed speakers also.
- Germany’s 4Q final GDP and CPI (Feb.
25) will also be in focus.
Gold Price Outlook:Spot gold, though somewhat stretched at current levels, is drawing support from a weaker Dollar, geopolitical worries and tariff uncertainties.The yellow metal will target $5450 if it manages to close above $5150 for two straight sessions.
Support is at $5100/$5000.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own.
These opinions do not represent the views of The Times of India)
