Today’s market analysis on behalf of Chris Weston Head of Research at Pepperstone
7th February 2025
The momentum in the gold price has stalled – at least for now – which perhaps won’t surprise given US nonfarm payrolls looms large, positioning has become incredibly rich and several technical indicators suggest highly overbought conditions – that said, gold may be too hot to chase higher here, but it’s here for a reason and for those who feel that any impending pullbacks are likely to be shallow it makes it incredibly hard to short the yellow metal for anything other than an intraday trade.
The news on the insatiable demand in the physical market is now well known to markets, with lease and funding rates at elevated levels, while the tailwinds from solid central bank buying are now also firmly in the price – subsequently, with the market trying desperately to move on from pricing tariff risk, the question becomes what takes gold through the recent highs of $2882 and into $2900? A weaker NFP print may be helpful, as it would bring a degree of implied Fed rate cuts forward, as would next week’s US CPI print – however, when gold rips it pays to think less about the why, and to place reasoning to the move after the fact – if gold kicks through $2882 it is there for chasing as a body in motion can stay in motion.