Gold Price Repeatedly Fails to Break $5,200, Fed Officials Issue Hawkish Remarks

TradingKey - During the Asian trading session on February 27, Gold prices (XAUUSD) attempted to break above $5,200/oz once again. After a brief breakout, prices retreated as bulls showed significant signs of profit-taking. Short-term speculative capital's willingness to exit intensified, and fundamental support began to soften.

Federal Reserve officials have recently issued a series of hawkish remarks, causing market expectations for interest rate cuts this year to continue cooling, which has further reinforced the logic behind the strengthening of the U.S. dollar and Treasury yields.

Citi recently warned of a potential 10%-15% short-term correction in gold prices. Furthermore, with no substantive breakthroughs in U.S.-Iran or Russia-Ukraine negotiations and no escalation in geopolitical risks in the Middle East or Europe, safe-haven sentiment has cooled at the margin, and the market's risk premium continues to recede.

Trading Strategy:

5,204 is a strong zone for bears and is suitable for initiating short positions. This level represents the inflection point of the 1-hour volume-price divergence during the overnight surge, as well as the resistance level for filling the daily breakout gap. Combined with the upper edge of the high-volume area where bears actively increased positions during the day, bullish momentum is exhausting, making this a viable entry point for short orders.

5,222 is a level to add to positions. This point serves as the pivot of the high-volume cluster that bulls have repeatedly tested but failed to maintain over the last five trading days. It also acts as the neckline resistance for a 4-hour double-top pattern. A rebound to this level provides a window to add to positions to confirm the bearish trend, thereby lowering average holding costs.

The defensive stop-loss is set at 5,238. This level is the upper edge of the high-volume zone from the long-short struggle over the past three trading days and the acceleration point of the current uptrend; an effective breakout would invalidate the bearish structure.