Gold Briefly Drops Below $2,900, Oil Falls to Two-Month Low

Market Recap

Gold briefly fell below $2,900 per ounce on Tuesday as investors took profits, but safe-haven demand from Trump’s tariff plans and a weaker dollar helped prices recover. Meanwhile, crude oil dropped to a two-month low as weak economic data from the U.S. and Germany raised concerns about slowing energy demand, and Iraq signed a cooperation agreement with BP.

Gold Overview

Gold weakened throughout Tuesday, briefly dipping below the $2,900 level due to profit-taking. However, growing concerns over Trump’s tariff plans and a declining U.S. dollar attracted dip buyers, helping gold recover some losses. By the close, spot gold fell 1.27% to $2,914.95 per ounce.

Ukraine-U.S. Mineral Agreement: Reports suggest that Ukraine and the U.S. have reached an agreement on mineral resources, which could be signed this week. This may indicate easing geopolitical tensions, potentially reducing gold’s appeal as a safe-haven asset.
Trump’s Tariff Plans: Trump ordered an investigation into U.S. copper imports, aiming to rebuild domestic production. Analysts see this as a potential trigger for new tariffs, which could bolster gold prices.
Weak U.S. Economic Data: The U.S. February Conference Board Consumer Confidence Index fell sharply to 98.3, marking the biggest monthly decline in over three years. This heightened concerns about economic slowdown, further supporting gold.
SPDR Gold ETF Holdings: The world’s largest gold-backed ETF, SPDR Gold Trust (GLD), increased holdings for the fifth consecutive day, reaching 907.53 tons, the highest since August 2023.

Gold – Technical Outlook

Gold faced resistance at the $2,950 level and saw a strong sell-off, breaking below $2,900 before rebounding. The overall trend remains bullish, but a period of consolidation may be expected.

Key Resistance: $2,935 – $2,940
Key Support: $2,900 – $2,895

Oil Overview

Oil prices dropped over 2% on Tuesday, hitting a two-month low, as weak economic data from the U.S. and Germany heightened concerns over slowing energy demand. Iraq’s cooperation agreement with BP further pressured prices.

U.S. & German Economic Weakness:

The U.S. Conference Board Consumer Confidence Index recorded its largest monthly decline in three years, signaling potential economic slowdown.
Germany’s GDP contracted 0.2% in Q4 2023, reinforcing recession fears.

Trump’s Tariff Plans & Inflation: Analysts warn that new tariffs could stoke inflation, leading the Fed to keep rates higher for longer, potentially dampening economic growth and energy demand.Iraq-BP Agreement: Iraq, OPEC’s second-largest oil producer, signed a deal with BP to upgrade four oil and gas fields in Kirkuk. This follows Iraq’s ongoing efforts to resume Kurdish oil exports via Turkey.

Oil – Technical Outlook

Oil faced strong resistance at $71.2, accelerating losses through the $70 psychological level, ultimately closing near $68.9. The bearish trend remains dominant.

Key Resistance: $70.3 – $70.8
Key Support: $68.0 – $67.5

Oil prices face continued downside pressure as economic concerns weigh on demand, with $68 acting as a key support level.

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