gold prices are currently holding steady around $2,900, having trouble capitalizing on a recent recovery. The market sentiment has turned cautious, largely due to a rebound in the US Dollar, as investors prepare for critical US-Russia bilateral discussions scheduled to take place in Saudi Arabia.
High-level representatives from the US and Russia are set to engage in talks aimed at potentially resolving the ongoing conflict in Ukraine. While there is optimism about the possibility of a peace agreement, apprehension remains as these discussions might progress without input from Ukraine and European leaders. Recent meetings, including an emergency summit hosted by France, highlight the complexities surrounding this situation, particularly with US officials indicating that Europe may not have a role in the upcoming negotiations.
The subdued risk appetite among investors has bolstered the safe-haven appeal of the US Dollar, weighing on gold prices. Additionally, comments from Federal Reserve officials regarding a cautious approach to inflation and interest rates have reinforced the dollar’s strength. Notably, concerns have been raised that rising asset prices could hinder the Fed’s efforts in addressing inflation, with some members indicating that interest cuts may not be warranted until 2025, depending on upcoming inflation trends.
As the focus shifts to further statements from Fed officials and the pending release of the Minutes from January’s meeting, the outcomes of the US-Russia talks are poised to be the main influence on market sentiment. If negotiations falter, risk-averse investors could turn back to gold , potentially driving its price higher alongside the dollar.
In terms of technical analysis, gold continues to hover around the $2,900 mark, with an absence of buying momentum observed on the daily charts. Should selling pressure increase, the price may test the recent low of $2,864, which could signal additional downward movement. Conversely, if the bullish momentum regains strength, gold might aim for a new high near $2,943, with significant resistance identified at the $2,970 mark ahead.
