Today’s market analysis on behalf of Chris Weston Head of Research at Pepperstone
3rd March 2025
With so much attention on the crypto scene and the incredible moves seen in the alt and meme coins, as well as the unfolding news flow surrounding the push for a Russia/Ukraine 1-month peace deal, gold has quietly gone about its business seemingly under the radar today. Traders focus and flows on gold should increase though with the event risk set ramp up and test gold traders – where the range of outcomes that could play out from the US tariff risk, US economic data and central bank speeches, make pricing risk highly problematic.
The gold market has had it as good as it gets of late, with US 2yr real rates collapsing below 1%, weaker US data resulting in US swaps traders adding one additional 25bp cut by Dec 2025, central bank accumulation and the massive migration of gold to Comex vaults – however, the bullish momentum shifted last week, and traders have liquidated profitable positions amid the higher volatility regime and the reversal and outperformance in the USD. One can also make a case that if the tariffs do go through as threatened on Mexico, Canada, China and Europe, that risky assets won’t take this well at all, and gold could benefit from the uncertainty. Another way of thinking is that if cross-asset volatility does really kick up and equity moves sharply lower gold will follow these markets lower – with forced selling a clear risk as traders liquidate profitable positions to free up equity in the portfolio or to fund margin calls.
As always, I am guided by the market and the price action in gold. A daily close below $2857 would increase the risk of a deeper move lower to the 100-day moving average (currently $2722), while the bulls will want to see a push through Friday’s high of $2885 to feel more confident that the pullback from the $2956 high has run its course.