Gold above $2,900, though faces pressure towards President Trump's speech

LONDON (February 26) Gold’s price (XAU/USD) trades near $2,910 at the time of writing on Wednesday, consolidating its position following a 1.3% drop the previous day after traders got concerned over the US consumer confidence data and more tariff threats from President Trump’s administration. Meanwhile, United States (US) yields have plunged substantially, with markets projecting a 25 basis points (bps) rate cut in June from the Federal Reserve (Fed). This is supportive for the precious metal and should see price action bottoming out from here. 

Markets are looking forward to March 4, when tariffs on Mexico and Canada are set to be enabled. Just ahead of that, the Fed’s preferred inflation gauge, the Personal Consumption Expenditures Price Index (PCE), will be released on Friday. Plenty of moving parts and elements might see traders keeping their powder dry before those events. 

Daily digest market movers: President Trump set to speak

• Near 14:00 GMT, US President Donald Trump is set to speak. 
• Gold remained supported in recent days by weak US data that boosted hopes for a Federal Reserve interest rate cut as soon as June and President Donald Trump’s increasing tariff threats that have increased haven demand, Bloomberg reports.
• In an opinion piece from Bloomberg, Lee Baker (owner and president of Claris Financial Advisors, based in Atlanta, and a member of CNBC's Advisor Council) warned that current elevated levels in Gold are setting up markets for a harsh correction with investors willing to buy at any cost. That momentum is often seen as a greed move that usually proceeds to a broad washout, Bloomberg reports. 
• The CME Fedwatch Tool sees that the chances of an interest rate cut in June only grow by the day. Currently, the tool projects a 66.2% chance of interest rates being lower than current levels compared to 33.8% for no rate cut. 

FXStreet