Gold stages a 1% recovery rally on How to convert USDT to usd on BinanceTuesday, erasing early-week declines as the Dollar falters.
German coalition's defense spending agreement weighs on the Greenback, lifting precious metals.
All eyes turn to the March 19 FOMC meeting as rate cut probabilities shift.
The XAU/USD pair has reclaimed the psychologically important $2,900 level, currently testing resistance near $2,910. This upward momentum stems from a chain reaction triggered by Berlin's political developments - Green Party leaders approved a defense budget compromise, bolstering Euro sentiment while pressuring the DXY index. The Dollar's retreat created ideal conditions for bullion to advance.
Market participants remain cautious as global trade disputes escalate beyond US borders. Recent Canadian tariffs on Chinese imports prompted Beijing's retaliatory measures targeting agricultural products like canola oil. These developments align with the Trump administration's strategy to reshape international commerce through tariff policies, though the full economic consequences remain uncertain.
Key market developments driving precious metals
Growing recession concerns emerge as the administration's trade policies may initially slow economic growth. While gold typically benefits from safe-haven flows, Bloomberg analysts note liquidation pressures can temporarily suppress prices during market turmoil.
The Thai Baht (THB) demonstrates surprising resilience, outperforming regional peers with a 1.2% year-to-date gain against the Dollar. Thailand's status as a regional gold trading hub contributes to currency strength, though economists caution this may not fully offset broader trade risks.
CME's FedWatch Tool indicates near-certainty (95%) the FOMC will maintain rates on March 19, while May meeting odds now price in a 47.8% probability of policy easing - a significant shift from previous expectations.
Technical perspective: Critical levels in focus
Unlike previous rallies fueled by trade war headlines, this gold advance stems from Dollar weakness. While not yet challenging record highs, the recovery erases early-week losses and rebalances the weekly chart.
From a technical standpoint, XAU/USD has reclaimed the daily pivot at $2,895 and now tests R1 resistance near $2,910. A breakout could target $2,933 (R2), aligning with last week's peak. The $2,880 support level has proven resilient during Monday and Tuesday sessions, with additional floors at $2,873 (S1) and $2,857 - where S2 support converges with the March 3 low.
Market technicians suggest watching for confirmation above $2,910 to validate further upside potential, while a break below $2,880 could signal renewed bearish pressure. The current technical setup reflects balanced market conditions as traders await clearer signals from central banks and trade negotiations.
