Gold prices are poised to end the week with gains of over 0.80% despite falling below $2,900 on Friday, as traders locked in profits ahead of the weekend. Mixed economic data from the US weighed on the Greenback, which hit yearly lows, while US Treasury yields plunged. Gold (XAU/USD) trades at $2,883, down 1.48% for the day. Retail sales in January fell sharply by -0.9% month-over-month, missing the expected -0.1%, though December’s figures were revised up to a 0.7% gain. The data led investors to price in multiple potential interest rate cuts by the Federal Reserve, pushing the 10-year US Treasury yield down six basis points to 4.472%.
Gold also benefited from traders squaring off positions amid a weak US Dollar and softening real yields, which tend to support bullion prices. Industrial production data showed improvement with a 0.5% month-over-month gain, beating forecasts of 0.3%, though slower than December’s 1% expansion. Additionally, the World Gold Council reported over 1,000 tons of central bank gold purchases for the third consecutive year in 2024, with a 54% year-over-year surge in purchases following Trump’s election victory.
Technically, gold’s uptrend remains intact despite the recent pullback. The Relative Strength Index (RSI) exited overbought territory, which could help halt further price declines if buyers defend the February 12 low of $2,864. Key support levels include the psychological $2,850 level, followed by the October 31 high at $2,790 and January 27’s low at $2,730. If buyers push prices above $2,900, resistance lies at the all-time high of $2,942. A breakout past that could open the path toward $2,950 and the $3,000 milestone for gold.
