27 Feb 2025

A mixed outlook from Nvidia, coupled with an ambiguous tariffs schedule presented by US President Trump, raises concerns. Gold is experiencing significant selling pressure, declining by over 1% on Thursday. Despite a further decrease in US yields, the precious metal has temporarily lost its support.

As of Thursday, the price of gold (XAU/USD) is under considerable selling pressure, continuing this week's correction and reaching a ten-day low near $2,880. This decline follows a cabinet meeting on Wednesday, during which US President Donald Trump expressed uncertainty regarding the implementation of tariffs, including the timing and the countries affected.

President Trump announced that "tariffs will go on, not all, but a lot of them," indicating that tariffs on imports from Canada and Mexico will take effect on April 2. He also stated that reciprocal tariffs are expected to be implemented on the same date. Additionally, the US President confirmed a 25% tariff on European automobiles and other goods, although he did not elaborate further on this matter.

Daily market movers update: March is approaching

Overnight, markets prepared for Nvidia’s (NVDA) earnings report. Nvidia's quarterly revenue is projected to reach approximately $43 billion, slightly exceeding analysts' expectations; however, gross profit margins are anticipated to be tighter than previously thought due to the introduction of a new chip design known as Blackwell. This mixed forecast arrives at an inopportune time, as concerns regarding reduced spending on AI and the potential effects of US tariffs may pose additional challenges for the company.

The CME Fedwatch Tool indicates a 33.0% probability that interest rates will remain unchanged in June, with the remainder suggesting a potential rate cut.

On the US economic front, the second estimate of the Gross Domestic Product (GDP) for the fourth quarter is scheduled for release at 13:30 GMT. It is anticipated that the annualized GDP will hold steady at 2.3%. The preliminary quarterly Personal Consumption Expenditures (PCE), which precedes the monthly PCE report due on Friday, is also expected to remain stable at 2.3%. The core PCE figure is projected to be 2.5%, unchanged from previous estimates.

Technical Analysis: Monitor the Stop Levels

On Wednesday, several analysts cautioned that excessive buying behavior was evident in the Gold market, as traders appeared eager to purchase at any price to maintain their participation in the ongoing rally. With the current market correction, numerous traders may soon experience a squeeze, leading to the activation of their stop losses. This unique market behavior is likely to generate increased selling pressure, potentially resulting in a significant decline in Bullion, with a possibility of reaching $2,860 within the day.

The key factor for a potential reversal lies at the daily Pivot Point of $2,912. If Gold manages to recover and surpass this threshold, it would indicate that traders are capitalizing on the current dip. Beyond this point, the levels of $2,934 and $2,951 should be monitored as they represent the intraday R1 and R2 resistance levels.

Conversely, the low recorded on Tuesday at $2,890 is beginning to falter. Should the price decline further, pay attention to the S2 support level at $2,873, which could pave the way for a test of $2,860.