Gold prices reached $3,000 per ounce for the first time ever on Friday, before pulling back slightly due to profit-taking around that expected level. Investor interest in safe-haven assets increased as they sought protection from the economic uncertainty caused by the tariff war initiated by U.S. President Donald Trump. Traders will closely monitor the ongoing trade war between the U.S. and most countries worldwide for potential market signals. Next week, three major central banks are set to announce interest rate decisions, although it remains uncertain whether any significant shifts in policy will occur. If any of them adopts a more dovish stance than expected, it could provide further support for gold forecasts. On the other hand, a significant easing of the trade war or progress in peace talks between Russia and Ukraine could diminish gold's appeal as a safe haven, shifting investor interest towards risk-sensitive assets like stocks.

Alongside trade war doubts, gold also benefited from a weak U.S. dollar, driven by weak U.S. economic data. If this trend of weak data continues, gold may continue to gain.

Last week, we had weaker data for the Consumer Price Index and Producer Price Index inflation, which kept pressure on the dollar against most major currencies. Then on Friday, we had a consumer confidence survey from the University of Michigan that was weaker than expected, coming in at 57.9 versus 64.7 previously, and below the expected 63.1. This is now the third consecutive month of declines in consumer confidence, undoubtedly due to increasing concerns about the impact of Trump’s trade policies on economic confidence. This closely watched survey, which polls about 420 participants on current and future economic conditions, also provides insights into inflation expectations, as it asks participants about their price expectations for the next 12 months. Well, after rising last month to 4.3% from 3.3%, we saw another significant jump in consumer inflation expectations to 4.9% in March. Signs of continued price pressures are increasing despite the decline in core Consumer Price Index and Producer Price Index inflation.

Meanwhile, it is widely expected that the U.S. Federal Reserve will keep interest rates unchanged at its scheduled meeting on March 19. However, any indication of a rate cut before the expected date could weaken the dollar. The Fed needs to assess the impact of tariffs on inflation, alongside the broader uncertainty they cause, in addition to recent indicators of weakening U.S. economic data. Market participants will closely monitor the policy statement, economic outlook, and Federal Reserve Chairman Jerome Powell's press conference for any changes in expectations.

Technical Outlook

From a technical perspective, it is quite simple: the path of least resistance on the gold chart remains upward as long as the market maintains its structure of higher highs and higher lows. The main support now lies at the $2,929-$2,956 level, which previously acted as resistance. The short-term upward trendline, established since the beginning of the year, represents a critical threshold - if it is broken, especially without the recent low at $2,880, it would indicate the potential for a trend reversal. Only in this scenario would the technical outlook for gold turn bearish.

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