Market Overview
On Wednesday, heightened concerns over Trump’s policy uncertainties fueled risk aversion, driving the dollar to a two-week low during the session. Gold continued its upward trajectory, briefly surpassing the $2,760 mark to hit a nearly three-month high, closing at $2,756.01 per ounce.
Oil prices extended their losses amid market anxiety over Trump’s escalating threats, with both WTI and Brent crude hitting their lowest levels since January 9.
Gold Overview
Gold prices surged on Wednesday as increased uncertainty around Trump’s policies spurred risk-averse sentiment, weakening the dollar to a three-week low. Gold briefly crossed the $2,760 level, marking its highest point in nearly three months. By the session’s end, gold rose 0.43% to settle at $2,756.01 per ounce.
Trump’s policy plans continue to unsettle markets, particularly as details on proposed tariffs remain vague, fueling speculation about their potential impact.
Ryan McIntyre, Senior Portfolio Manager at Sprott Asset Management, commented:
“Proposed tariffs and other uncertainties are amplifying market volatility. In such scenarios, gold often performs well as a preferred safe-haven asset.”
Adding to the turbulence, Trump’s posts on Truth Social intensified market concerns. He revised an earlier statement, warning of potential sanctions against Russia if President Putin refuses to negotiate an end to the nearly three-year-long conflict. Trump stated:
“If we cannot reach an agreement soon, I’ll have no choice but to impose steep tariffs on Russian goods exported to the U.S. and introduce sanctions, extending similar measures to related nations.”
During early trading, the U.S. dollar index touched its lowest point in three weeks, making gold cheaper for holders of other currencies and supporting its rally. However, as the dollar rebounded, gold prices faced headwinds, retreating from a peak of $2,763.27 due to profit-taking by short-term traders.
Technical Analysis for Gold
On Wednesday, gold exhibited strong bullish momentum:
- During Asian and European sessions, prices surged past $2,745, accelerating to break the $2,758 resistance before retreating into a consolidation phase.
- The U.S. session saw gold retesting the $2,746 level, stabilizing before another attempt to rally, peaking at $2,763 before closing slightly lower.
- The overall bullish pattern remains intact, with $2,730 identified as a key support level for continued upward momentum.
Gold Outlook for Today
- Strategy: Prioritize buying on dips, with short positions on rebounds as secondary options.
- Key Resistance: $2,770–$2,775.
- Key Support: $2,740–$2,745.
Oil Overview
Oil prices continued their downward trend on Wednesday, driven by market concerns over Trump’s broadened threats.
- WTI Crude (March): Fell $0.39 (-0.51%) to $75.44 per barrel.
- Brent Crude (March): Dropped $0.29 (-0.36%) to $79.00 per barrel.
President Trump issued another warning on Wednesday, stating that the U.S. would impose tougher sanctions and tariffs on Russian goods if peace talks with Ukraine failed to materialize.
Markets are evaluating the potential impact of Trump’s tariff plans on global economic growth and energy demand.
- Brent crude marked its fifth consecutive day of losses, its longest losing streak since September.
- WTI crude experienced a four-day decline, the first since November, with both benchmarks closing at their lowest since January 9.
Analysis
Ritterbusch and Associates noted in a statement:
“The sanctions Trump’s administration might implement remain unclear, but potential tariffs on Canada and Mexico have become a primary source of uncertainty for traders.”
Technical Analysis for Oil
On Wednesday, oil exhibited mixed movements:
- During Asian and European sessions, prices rebounded off the $75 mark but failed to sustain momentum, with resistance at $76.4 triggering a pullback.
- In the U.S. session, prices struggled below $76, ending the day with bearish momentum, marking five straight sessions of declines.
Oil Outlook for Today
- Strategy: Focus on selling during rebounds, with buying on dips as a secondary approach.
- Key Resistance: $76.4–$76.9.
- Key Support: $73.5–$74.0.
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