Gold rebounded modestly ahead of the Fed minutes: was it a "dead cat bounce" or a continuation of the bull market?
2026-02-18 20:44:13
On Wednesday (February 18), spot gold prices rose in the European session due to buying interest at lower levels, currently trading around $4,920 per ounce, up about 0.85% on the day. After falling to a more than one-week low of $4,841.31 per ounce in the previous trading day, gold prices have generally stabilized and strengthened.
Despite a modest rebound, the short-term outlook for gold prices has turned slightly bearish due to evolving macroeconomic headwinds and a weakening technical structure that continues to suppress upward attempts.
Recent signs of progress in the US-Iran nuclear negotiations in Geneva, coupled with US-led efforts to end the Russia-Ukraine conflict, have helped ease geopolitical tensions and curbed safe-haven flows into gold.
Iranian Foreign Minister Abbas Araqchi stated that both sides have reached a "general consensus on a set of guiding principles" regarding a potential nuclear agreement. The report also stated that Iranian negotiators are expected to return with a proposal in two weeks for further discussions.
Meanwhile, a stronger dollar also put pressure on the precious metal as resilient US labor market data weakened expectations of an imminent Federal Reserve rate cut. Nevertheless, easing inflation has kept market expectations for further monetary easing in the second half of the year.
Federal Reserve Governor Michael Barr said on Tuesday that borrowing costs should remain unchanged for some time until clearer evidence emerges that inflation is moving toward the 2% target. Meanwhile, Chicago Fed President Austan Goolsby said further interest rate cuts could be possible in 2026 if inflation continues to slow.
Investors' attention is now turning to the U.S. economic calendar, with January industrial production, December durable goods orders, and the minutes of the Federal Open Market Committee meeting taking center stage.
On Friday, the market will also focus on the preliminary reading of the U.S. fourth-quarter gross domestic product (GDP) and the core personal consumption expenditures (PCE) price index for further clues about the Federal Reserve's monetary policy path, which could provide new directional guidance for gold.
Overall, the broader uptrend in gold prices remains intact as continued macroeconomic and geopolitical drivers continue to provide support. The current price action is more likely to reflect a consolidation phase or temporary pause than a structural shift in underlying bullish momentum.
From a technical perspective, the 4-hour chart for spot gold highlights a clear tug-of-war between bulls and bears, reflecting market uncertainty. The price is trading below the 100-period moving average (MA, 5011.57) but above the 200-period moving average (4826.13), presenting a neutral signal.
The Relative Strength Index (RSI) is below the midline of 50, reinforcing the short-term outlook of weak momentum. The MACD oscillator is also in negative territory, indicating bearish pressure.
A sustained close above the 100-period moving average (MA) would strengthen short-term bullish momentum and suggest a potential rebound towards higher resistance levels. Conversely, a break below and close below the 200-period MA would exacerbate bearish pressure, with the next support target at $4,800, followed by $4,700.
(Spot gold 4-hour chart, source: FX678)
At 20:39 Beijing time, spot gold was trading at $4,923.27 per ounce.
Despite a modest rebound, the short-term outlook for gold prices has turned slightly bearish due to evolving macroeconomic headwinds and a weakening technical structure that continues to suppress upward attempts.
Easing geopolitical risks and a stronger dollar limited upward momentum.
Recent signs of progress in the US-Iran nuclear negotiations in Geneva, coupled with US-led efforts to end the Russia-Ukraine conflict, have helped ease geopolitical tensions and curbed safe-haven flows into gold.
Iranian Foreign Minister Abbas Araqchi stated that both sides have reached a "general consensus on a set of guiding principles" regarding a potential nuclear agreement. The report also stated that Iranian negotiators are expected to return with a proposal in two weeks for further discussions.
Meanwhile, a stronger dollar also put pressure on the precious metal as resilient US labor market data weakened expectations of an imminent Federal Reserve rate cut. Nevertheless, easing inflation has kept market expectations for further monetary easing in the second half of the year.
Federal Reserve Governor Michael Barr said on Tuesday that borrowing costs should remain unchanged for some time until clearer evidence emerges that inflation is moving toward the 2% target. Meanwhile, Chicago Fed President Austan Goolsby said further interest rate cuts could be possible in 2026 if inflation continues to slow.
Investors' attention is now turning to the U.S. economic calendar, with January industrial production, December durable goods orders, and the minutes of the Federal Open Market Committee meeting taking center stage.
On Friday, the market will also focus on the preliminary reading of the U.S. fourth-quarter gross domestic product (GDP) and the core personal consumption expenditures (PCE) price index for further clues about the Federal Reserve's monetary policy path, which could provide new directional guidance for gold.
Overall, the broader uptrend in gold prices remains intact as continued macroeconomic and geopolitical drivers continue to provide support. The current price action is more likely to reflect a consolidation phase or temporary pause than a structural shift in underlying bullish momentum.
Technical Analysis: With the RSI remaining below 50, the short-term outlook suggests that bears may gain the upper hand.
From a technical perspective, the 4-hour chart for spot gold highlights a clear tug-of-war between bulls and bears, reflecting market uncertainty. The price is trading below the 100-period moving average (MA, 5011.57) but above the 200-period moving average (4826.13), presenting a neutral signal.
The Relative Strength Index (RSI) is below the midline of 50, reinforcing the short-term outlook of weak momentum. The MACD oscillator is also in negative territory, indicating bearish pressure.
A sustained close above the 100-period moving average (MA) would strengthen short-term bullish momentum and suggest a potential rebound towards higher resistance levels. Conversely, a break below and close below the 200-period MA would exacerbate bearish pressure, with the next support target at $4,800, followed by $4,700.
(Spot gold 4-hour chart, source: FX678)
At 20:39 Beijing time, spot gold was trading at $4,923.27 per ounce.
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