Technical analysis of spot Gold on February 26.
On Wednesday (February 26), spot Gold fluctuated downward during the European trading session. Yesterday, Gold fell sharply from its historical high, and currently, the fundamental risk aversion support for Gold has weakened. From a technical perspective, it is seriously overbought, and under the crowded long positions, Gold may enter a significant adjustment phase. It is important to note that even if the USA Consumer Confidence Index declines and expectations for a Federal Reserve interest rate cut increase, it has not driven Gold prices to strengthen, mainly because the increase in Gold prices deviates significantly. After the risk aversion sentiment is fully priced in, if there is no further fundamental stimulus, the possibility of high-level fluctuations cannot be ruled out. This week, pay attention to the USA PCE Price Index, short term.
Technical analysis: Spot Gold may retest the resistance level at 2957 dollars.
On Wednesday (February 26) in the Asian market, spot Gold rebounded but faced resistance, having earlier reached the 2930 level, and is currently trading around 2916.72 USD/ounce. Reuters technical analysts pointed out that spot Gold may retest the Resistance level of 2957 USD per ounce as it has stabilized near the Resistance level of 2891 USD. The significant drop on February 25 may have been driven by wave (4), followed by an upward wave (5) that may break through 2957 USD. The five-wave cycle began at 2614 USD. The challenging part is identifying wave (4).
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Technical analysis of spot Gold on February 25.
On Tuesday (February 25), during the European trading session, spot Gold fluctuated and declined. In the short term, there is a risk of adjustment, and one should be cautious of amplified volatility at high levels leading to a drop. Fundamentally, the anticipation of an earlier rate cut by the Federal Reserve supports Gold prices reaching an all-time high. However, profit-taking by long positions has caused Gold to adjust accordingly, while SPDR's continuous Shareholding has reached the highest level since 2022. In the short term, the long positions are crowded, and the mid-term long structure has yet to change, waiting for a pullback opportunity. From a graphical perspective, Gold's daily chart is severely overbought, and the MACD Indicators continue to decline. Currently, the downward status has not accelerated; if it breaks below 2920 dollars, a significant drop in Gold prices cannot be ruled out.
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