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On Tuesday, Gold prices hovered near 2,900 USD per troy ounce, holding steady as the US dollar weakened and demand for safe-haven assets rose. Concerns about the US economic outlook and escalating trade tensions continue to support Gold’s consolidation.
 

Key market drivers for Gold

Fears of an economic downturn intensified after President Donald Trump referred to the current situation as a "period of transition" in an interview with Fox News, implying that current policies may lead to a recession.

Meanwhile, trade tensions remain elevated. The US had recently delayed imposing a 25% tariff on select Canadian and Mexican goods for a month while Canada maintained its retaliatory measures. China imposed additional tariffs on some American agricultural products in response to the US tariff hikes.

Federal Reserve Chair Jerome Powell acknowledged increasing economic uncertainty but refrained from signalling an imminent interest rate cut.

This week, US inflation data will be in focus, as it may shape the Fed’s future policy outlook. The next Federal Reserve meeting is scheduled for 19 March.

Technical analysis of XAU/USD

(Click on image to enlarge)

On the H4 chart, Gold recently formed a growth wave to 2,931 USD, followed by a correction to 2,880 USD. An upward move towards 2,906 USD is forming a consolidation range around this level. A breakout to the upside could trigger a further rise towards 2,980 USD, the local target. After reaching this level, a correction back to 2,900 USD is likely. If the price moves downward from the consolidation range, a correction to 2,860 USD is possible. This scenario is supported by the MACD indicator, with its signal line positioned above zero and pointing sharply upward.

(Click on image to enlarge)

On the H1 chart, Gold completed a correction wave to 2,880 USD, and the market is now forming a new growth wave towards 2,906 USD, which is expected to be reached today. A subsequent potential pullback to 2,891 USD may occur, forming a consolidation range around this level. If Gold breaks downward from this range, a correction to 2,860 USD is possible before a renewed upward move. However, an upward breakout would open the path towards 2,980 USD. The Stochastic oscillator confirms this scenario, with its signal line above 80 and pointing firmly upward.
 

Conclusion

Gold remains in consolidation, balancing between a weakening US dollar and ongoing economic uncertainties. Technical indicators suggest a likely upward move towards 2,980 USD, though short-term corrections to 2,900 USD or 2,860 USD could occur before further gains. Market sentiment largely depends on upcoming US inflation data and its potential impact on Federal Reserve policy expectations.

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