- Gold prices come from a weekly height in the middle of common risk.
- The fear of commercial wars, lowering the Fed rate, and bearish US dollars can support the goods.
- Traders can also wait for the release of the definitive US NFP report on Friday.
Gold prices (XAU/USD) experienced some selling pressure during the early European session on Thursday but managed to remain above the key $2,900 level. The recent easing of U.S. trade tariffs on Canada and Mexico has bolstered investor interest in riskier assets, which has reduced demand for the safe-haven metal. Despite the decline, the move lacks significant fundamental drivers and is expected to be relatively contained.
Concerns about U.S. President Donald Trump’s tariff policies and the growing risks of a global trade conflict continue to support gold prices. Moreover, the possibility that Trump’s policies could slow U.S. economic growth and prompt the Federal Reserve to cut interest rates multiple times in 2025 should help limit further declines in gold, urging caution for bearish traders.
Market Highlights: Gold Slips Amid Strong Risk Sentiment, Easing Safe-Haven Demand
- US President Donald Trump’s new 25% tariffs on most imports from Mexico and Canada took effect on Tuesday, along with the doubling of duties on Chinese goods to 20%.
- Canada announced retaliatory tariffs against more than $100 billion worth of US products, while China slapped tariffs of up to 15% on various US agricultural exports.
- In his first address to the US Congress, Trump said that further tariffs, including “reciprocal tariffs” would follow on April 2, raising the risk of an all-out trade war.
- Investors remain worried that Trump’s tariffs could slow the US economic growth and force the Federal Reserve to cut interest rates multiple times by the end of this year.
- The bets were lifted by the Automatic Data Processing (ADP) report, which showed that US private sector employment grew by just 77K in February, vs 140K expected.
- Meanwhile, the economic activity in the US service sector continued to expand at an accelerating pace in February, though it did little to inspire the US Dollar bulls.
- The USD Index (DXY) drops to its lowest level since December 2024 and further acts as a tailwind for the Gold price during the Asian session on Thursday.
- The White House announced a one-month delay for US automakers to comply with the US–Mexico–Canada Agreement regarding the tariffs imposed on Mexico and Canada.
- This, in turn, boosts investors’ appetite for riskier assets, which is holding back traders from placing aggressive bullish bets around the safe-haven XAU/USD pair.
- Investors now look to the usual Weekly Initial Jobless Claims data from the US for some impetus, though the focus remains on the US Nonfarm Payrolls on Friday.
Gold Price Decline May Present Buying Opportunity, Downside Likely Capped Near $2,884-$2,883 Support
From a technical standpoint, sustained momentum beyond the immediate barrier at $2,934 could propel Gold prices toward the all-time high near the $2,956 level reached in February. Continued buying interest would likely serve as a fresh signal for bullish traders, supporting the extension of the multi-month uptrend indicated by positive daily chart oscillators.
However, the absence of consistent buying raises the need for caution before anticipating further gains. Nonetheless, any corrective pullback may present a buying opportunity around the $2,900 level, with downside risks likely to remain contained. On the other hand, continued selling pressure could open the door for deeper declines towards intermediate support in the $2,884-$2,883 range, potentially extending to the $2,860-$2,858 horizontal support zone.
