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Daily Gold Market Analysis- 05 February 2025

05 February 2025
OTC Market Data
High
Low
Close
Previous
Change ZAR
Change %
Gold
55942
55270
55805
55413
+392
+0.71%

Gold markets are riding a wave of safe-haven demand, buoyed by renewed fears of a US-China trade war and the uncertain trajectory of global economic growth. As US President Donald Trump’s tariff policies keep markets on edge, investors are flocking to gold amid rising inflation concerns and slowing global trade. With Chinese traders returning after the Lunar New Year and mixed US economic data adding to the volatility, today’s report provides an in-depth look at the technical and fundamental forces driving gold’s price action.

Fundamental Analysis

Gold continues to attract strong safe-haven flows as uncertainty over US trade policies with China, Canada, and Mexico heightens market volatility. The Trump administration’s decision to delay tariffs on Canada and Mexico by a month, combined with ongoing US-Sino tensions, has kept investors wary. The return of Chinese traders following the Lunar New Year holiday adds further complexity, potentially intensifying market reactions.

Mixed US economic data, including weaker-than-expected ISM Manufacturing PMI and Job Openings survey results, has sustained market bets on two Federal Reserve rate cuts this year, even as some Fed policymakers express caution. This dovish outlook remains supportive of gold prices, offering a counterbalance to rebounding US bond yields.

Gold Technical Analysis

The daily chart signals caution for gold bulls as the 14-day Relative Strength Index (RSI) remains deep in overbought territory at 75. A pullback is possible if buying momentum stalls, though the broader uptrend remains intact, supported by a Bull Cross between the 50-day and 100-day Moving Averages.

If a correction sets in, gold could challenge the $2,800 round level, followed by the February 3 low of $2,772. Further declines could expose the January 30 low of $2,754, with the 21-day Moving Average at $2,731 serving as the final line of defense for buyers. On the upside, gold needs a daily close above $2,850 to break into new record territory en route to the $3,000 psychological level.

Technical Indicators:

  • Stochastic Oscillator: 95 (overbought, suggesting imminent consolidation)
  • Relative Strength Index (RSI): 75 (overbought, potential for a near-term pullback)
Support 3
Support 2
Support 1
Current Market Price
Resistance 1
Resistance 2
Resistance 3
54482
54856
55335
55898
56175
56700
57225

Indicator Definitions

  • Stochastic Oscillator:
    This momentum indicator compares an asset’s closing price to its price range over a specific period. It signals overbought conditions above 80 and oversold conditions below 20.
  • Relative Strength Index (RSI):
    This indicator measures the speed and magnitude of price changes to evaluate overbought or oversold conditions. A reading above 70 indicates overbought, while below 30 suggests oversold conditions.
Key US Economic Reports & Events
When
Actual
Expected
Previous
ADP Non-Farm Employment Change
5:15pm
148K
122K
Final Services PMI
6:45pm
52.9
52.8
ISM Services PMI
7:00pm
54.2
54.1

Conclusion

Gold markets are at a crossroads, balancing between sustained safe-haven demand and technical overbought conditions. While the broader uptrend remains intact, a daily close above $2,850 is needed to propel prices toward the $3,000 milestone. Conversely, failure to hold $2,800 could trigger a correction toward $2,772 and $2,754. As traders await key US economic data and further developments in US-China trade relations, gold’s safe-haven status remains a key driver of market sentiment.

Disclaimer: This report is provided for informational purposes only, based on data from reputable sources, and is not intended as investment advice. ISA BULLION (Pty) Ltd makes no guarantees as to the report's accuracy or completeness and disclaims any liability for losses that may arise from reliance on this information. Users are advised to conduct their own research and consult with professional advisors before making investment decisions. ISA BULLION (Pty) Ltd, along with any associated directors, partners, officers, employees, or agents, expressly disclaims any responsibility for any direct or indirect loss or damage arising from the use or reliance on the information provided herein.