At the beginning of the Asian market on Friday (February 28th), spot gold was hovering at a low level, currently trading around $2875.33 per ounce. Gold prices fell 1.3% on Thursday, hitting a two-week low of $2867.86 per ounce during trading and closing at $2876.95 per ounce. On the one hand, the US durable goods orders data was stronger than market expectations, further cooling down expectations of a Federal Reserve interest rate cut, and the US dollar surged to a new high in a week, suppressing gold prices; On the other hand, as the Russia Ukraine war draws to a close, geopolitical concerns have cooled down, suppressing safe haven demand for gold, despite lingering concerns about the international trade situation.

The US dollar jumped 0.74% on Thursday, the largest daily increase since the beginning of the year, closing at 107.28. It reached a high of 107.30 during trading, a new high in nearly a week. US President Trump's latest tariff speech overshadowed signs of economic slowdown.

US President Trump announced on Thursday that his proposal to impose a 25% tariff on goods from Mexico and Canada will take effect as scheduled on March 4th. He also stated that he will impose an additional 10% tariff on goods from major Asian countries on the same day. This is also one of the reasons why the US dollar index surged on Thursday, and investors need to pay attention to further changes in market risk aversion sentiment.

In addition, despite the poor performance of initial jobless claims in the United States, durable goods orders increased by 3.1% month on month, far exceeding market expectations of 2%,; In addition, non defense capital goods orders, which reflect the company's expenditure plan and deduct aircraft, increased significantly by 0.8% in January and 0.2% in December. The year-on-year growth rate of core PCE in the fourth quarter of last year was revised upwards to 2.7%, compared to the previous value of 2.5%

Cleveland Fed President Hamack said she expects the Fed to temporarily maintain its interest rate policy unchanged. Philadelphia Federal Reserve President Huck expressed support for maintaining the current range of short-term borrowing costs in the United States.

The yield of US 10-year treasury bond rose for the first time in seven days on Thursday. The yield of US 10-year treasury bond rose 2.8 basis points to 4.283%, which also suppressed the gold price.

Alex Ebkarian, Chief Operating Officer of Allegiance Gold, said: 'The direction of gold is very clear, and these short-term bumps and some profit taking are just normal components of the cycle.'“

In terms of geographical situation, the United States and Russian delegations completed the first round of talks on bilateral relations in Istanbul, Türkiye, on the 27th. The two delegations held a closed door meeting for over 6 hours at the US Consulate General in Istanbul on the same day, and no news was immediately released to the media after the meeting. The two delegations have driven away from the negotiation site. According to Türkiye's diplomatic sources, this meeting is at the technical level.

On the 27th, US President Trump held talks with visiting British Prime Minister Stamer at the White House. When meeting with reporters before the closed door talks between the two sides began, Trump responded to his recent argument with Ukrainian President Zelensky over issues such as the US Russia negotiations and the US Ukraine mineral agreement, saying that the two of them were "a little stingy" with each other because the United States also wanted to get something from its aid to Ukraine like European countries. Trump complained, 'You know, they can get their money back by giving money to Ukraine, but we can't get our money back.'. Stamer took Trump's words and said, "We won't take back all of our (aid to Ukraine) either. What I mean is that a large part of the (aid to Ukraine) is gifts, sent out. Some are loans, but in fact, they are mainly gifts." This scene is similar to the one that happened during French President Macron's visit to the White House on the 24th.

On February 28th local time, Ukrainian President Zelensky is expected to visit the United States and meet with US President Trump to sign an agreement on the development of Ukraine's mineral resources.

According to the text released by Ukrainian media, this agreement on the establishment of reconstruction investment funds between Ukraine and the United States consists of 11 points. Multiple media outlets in the United States and Ukraine have noted that the agreement only mentions in point ten that "the US government supports Ukraine's efforts to obtain the security necessary to establish lasting peace

According to the latest news released by a senior US government official on the 27th, the mineral agreement that Trump plans to sign with Zelensky on the 28th does not include any future commitments from the US to support Ukraine. US Treasury Secretary Vincent also stated on the 27th that the relevant agreement has been completed and both sides will sign it on the 28th, and there will be no further negotiations on the issue. However, according to Ukrainian President Zelensky's statement on the 26th, the final version of the agreement does not involve any debt of Ukraine, and the mineral agreement with the United States is a "framework agreement". Further agreements will be reached to establish a fund.

The market is waiting for Friday's Personal Consumption Expenditures (PCE) price index report to see if inflation is under control. Two weeks ago, consumer price data for January was higher than expected, shocking the market. According to a Reuters survey, it is expected that the month on month increase in PCE index will remain at 0.3%.

The key question is whether the PCE price index is moderate enough to allow the Federal Reserve to return to interest rate cuts in the coming months after suspending them in January.

According to calculations by the London Stock Exchange Group (LSEG), federal funds rate futures traders believe that there will be a 60 basis point interest rate cut this year, with two cuts of 25 basis points each. The Federal Reserve is likely to resume interest rate cuts at its policy meeting in June or July.

The market expects the Federal Reserve to cut interest rates at least twice this year, with a cumulative rate cut of approximately 55 basis points expected by 2025.

It should be noted that the holdings of SPDRDE, the world's largest gold ETF, have decreased in the past two trading days after a significant increase last week. This reflects that the bullish sentiment in the market has subsided, and some bulls seem to be taking profits.