Precious Metals Market Preview
Gold breaks $2,900 milestone as Fed minutes loom amid tariff uncertainty
Executive Summary
Gold enters the trading week having achieved a historic milestone, breaking through $2,900 per troy ounce for the first time as geopolitical tensions and trade policy uncertainty fuel safe-haven demand. With U.S. markets closed Monday for Presidents Day, attention turns to Wednesday's FOMC minutes release and Friday's global PMI data. Silver maintains its ascending channel near $32.40, while platinum group metals face continued pressure from the accelerating EV transition.
Central banks remain aggressive buyers, with Poland leading February purchases at 29 tonnes. Technical indicators suggest further upside potential, though the strong dollar and elevated Treasury yields near 4.6% present headwinds. Markets expect 40-75 basis points of Fed cuts in 2025, starting potentially in June.
Current Market Position
Prices as of Monday, February 17, 2025 at 9:00 AM ET
| Metal | Current Price | Friday Close | Weekly Change | YTD Performance |
|---|---|---|---|---|
| Gold | $2,885.00 | $2,903.00 | -0.62% | +10.2% |
| Silver | $32.40 | $32.55 | -0.46% | +17.8% |
| Platinum | $935.00 | $928.00 | +0.75% | +1.2% |
| Palladium | $970.00 | $985.00 | -1.52% | -1.4% |
Technical Analysis
Gold: Historic Breakthrough Tests Sustainability
Gold's technical picture remains constructive despite the rapid advance. The successful defense of rising trendline support at $2,885 last week confirmed buyer commitment. With RSI at 66, the metal has eased from overbought conditions while maintaining its bullish posture. The psychological $2,900 level, once formidable resistance, should now provide support on any pullbacks.
Key resistance lies at the recent peak of $2,943, with a measured move targeting $2,970. The 21-day simple moving average at $2,822 offers significant support, having contained the February 6 pullback. Volume patterns remain healthy, suggesting genuine accumulation rather than speculative excess.
Silver: Ascending Channel Holds Promise
Silver's ascending channel pattern provides clear parameters for traders. The metal bounced from the lower channel boundary at $31.60, with the 9-day EMA at $32.08 offering immediate support. Resistance at $33.10 marks the upper channel boundary, with Thursday's four-month high at $33.41 the key level to overcome. RSI at 59 suggests room for further advances without entering overbought territory.
Key Technical Levels This Week
Gold Resistance
- $2,943 (Recent High)
- $2,970 (Measured Target)
- $3,000 (Psychological)
Gold Support
- $2,885 (Trendline)
- $2,850 (Minor)
- $2,822 (21-day MA)
Silver Resistance
- $33.10 (Channel Top)
- $33.41 (4-Month High)
- $34.50 (Target)
Silver Support
- $32.08 (9-day EMA)
- $31.60 (Channel Bottom)
Week Ahead Calendar
Monday, February 17 US Markets Closed
U.S. markets closed for Presidents Day, limiting trading volumes. International markets remain active with Japan releasing Q4 GDP data. Fed Governor Bowman speaks at 10:20 AM at the American Bankers Association Conference, while Fed Governor Waller addresses the economic outlook at 6:00 PM in Sydney.
Tuesday, February 18 Light Data
Relatively quiet with UK unemployment figures and a speech from BoE Governor Bailey. Fed Vice Chair for Supervision Michael Barr discusses artificial intelligence in finance at 1:00 PM in New York, potentially touching on financial stability concerns.
Wednesday, February 19 2:00 PM ET - HIGH IMPACT
FOMC MINUTES RELEASE - The week's centerpiece. Markets will scrutinize the discussion from the January 28-29 meeting for clues about timing and pace of potential rate cuts. Morning housing data including building permits and housing starts provide economic context. UK inflation data expected to show a rise to 2.8% year-over-year.
Thursday, February 20 8:30 AM ET
Labor Market Data - Weekly jobless claims and Philadelphia Fed Manufacturing Index (forecast: 25.5 from 44.3). China's Loan Prime Rate decisions could influence market sentiment. Multiple Fed speeches throughout the day may clarify policy positions following the minutes release.
Friday, February 21 9:45 AM ET
Global PMI Day - S&P Global flash PMIs for February across major economies. European and UK PMI data could influence dollar strength. Michigan Consumer Sentiment's final reading may show further deterioration to 67.8, reflecting consumer concerns about tariff impacts.
Trading Scenarios
Bullish Case
35% ProbabilityTriggers: Dovish FOMC minutes revealing concerns about growth, weak PMI data on Friday, or escalation in tariff tensions.
Targets: Gold breaks decisively above $2,943 targeting $2,970-3,000. Silver tests $33.41 resistance with breakout potential to $34.50.
Base Case
45% ProbabilityScenario: Continued range trading with upward bias. FOMC minutes balanced, economic data mixed.
Range: Gold consolidates $2,885-2,943, building energy for next move. Silver remains within ascending channel $32.00-33.00.
Bearish Case
20% ProbabilityRisks: Hawkish FOMC minutes emphasizing inflation risks, strong PMI data, or de-escalation in trade tensions.
Targets: Gold tests $2,850 support, potentially $2,822. Silver retreats to $31.60 channel support.
Key Themes for the Week
Tariff Uncertainty Dominates
The Trump administration's aggressive trade stance creates a complex environment for precious metals. The implementation of 25% duties on steel and aluminum, alongside 20% levies on Chinese goods, has sparked retaliatory measures from the EU and heightened safe-haven demand. Markets struggle to price the potential stagflationary effects.
Federal Reserve's Balancing Act
With the fed funds rate at 4.25-4.50%, officials project another 50 basis points of cuts through 2025, down from earlier expectations. Fed Chair Powell's emphasis on seeing "real progress" on inflation before easing further reflects concerns about tariff-induced price pressures. The February CPI reading of 2.8% remains uncomfortably above the 2% target.
Central Bank Gold Accumulation
February purchases already totaling 24 tonnes globally, with Poland's aggressive buying program leading the way. While not signaling a loss of confidence in the dollar, this diversification trend provides consistent support for gold prices. China's resumed reporting of gold purchases adds to the bullish narrative.
Three Things to Watch This Week
1. FOMC Minutes Tone
Wednesday 2:00 PM release will reveal internal Fed debate on rate cut timing
2. Dollar Strength
DXY near multi-year highs - any weakness could boost precious metals
3. Friday PMI Data
Manufacturing data will test growth differential thesis supporting dollar
Week Ahead Outlook
The week ahead promises to test gold's historic breakthrough above $2,900. Technical conditions support further gains, but much depends on Wednesday's FOMC minutes and Friday's growth indicators. The shortened week may amplify volatility as traders position ahead of key releases with reduced liquidity.
Silver's outperformance streak faces a crucial test at channel resistance. Industrial users may accelerate purchases if prices threaten a breakout, creating self-fulfilling momentum. The gold/silver ratio's extreme reading near 89 argues for mean reversion, though catalyst timing remains uncertain.
Broader market themes of tariff uncertainty, Fed policy evolution, and central bank accumulation should persist beyond this week. The interplay between growth concerns and inflation risks creates an unusually supportive environment for precious metals. While near-term consolidation wouldn't surprise given the recent advance, the medium-term outlook remains constructive as markets navigate an increasingly complex geopolitical and economic landscape.
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