Gold price nears $2,900 as hawkish Fed and profit-taking weigh
Gold price drops under pressure from the Fed’s hawkish stance and profit-taking.
Gold (XAU/USD) price is struggling to regain momentum after a sharp 2% decline from its all-time high of $2,950 per ounce. The drop sent prices below the key $2,900 level, which failed to hold as support, turning into a resistance zone. The retreat has erased most of this week's gains, reducing the price increase to just 1.29%.
As of Wednesday’s European session, gold is trading around $2,895, with limited movement since the Asian session as traders remain cautious ahead of key US inflation data. The yellow metal inability to hold above $2,900 raises concerns about further downside risk.
Gold price dynamics (September 2024-February 2025). Source: TradingView.
The price weakness follows hawkish remarks from Federal Reserve Chair Jerome Powell on Tuesday, which lifted the US dollar and pressured the non-yielding metal. Additionally, profit-taking has added to the downside pressure, marking the second consecutive day of selling. However, despite the decline, follow-through selling remains limited, with traders hesitant to make aggressive moves ahead of the US consumer inflation release.
Traders await U.S. inflation data for next gold price direction
The $2,880 level, where the latest pullback found support, will be crucial in determining whether buyers step in to defend the uptrend. A break below this level could accelerate declines, while a recovery above $2,900 may shift sentiment back in favour of buyers.
With inflation data on the horizon, market participants are likely to remain on the sidelines, waiting for fresh cues. Any surprises in the data could drive sharp moves in gold, especially given its recent volatility. The coming sessions will be key in determining whether gold resumes its uptrend or extends its correction below key support levels.
Gold price extended its bullish streak into the seventh consecutive week of 2025. The metal has surged 12% driven by heightened geopolitical tensions and inflation concerns.
