Key Points:
- Gold hovers above $2,920 per ounce, supported by safe-haven flows and dollar weakness.
- Markets await US non-farm payrolls data for insights into the Fed’s rate-cut trajectory.
Gold Strengthens Amid US Trade Policy Volatility
Gold prices edged above $2,920 per ounce on Thursday, approaching record highs, as a weaker US dollar and trade-related uncertainties bolstered demand for the safe-haven asset. The latest policy shifts from President Donald Trump added to market jitters, keeping gold well-supported.
Trump announced a temporary one-month exemption for US automakers from the newly imposed 25% tariffs on Canadian and Mexican imports, offering some relief to the industry. Officials hinted at the possibility of removing the 10% tariff on Canadian energy imports if they meet trade agreement requirements. However, the broader picture remains uncertain, as the US, Canada, Mexico, and China continue to engage in tariff battles.
The ongoing trade tensions have prompted China to file a revised consultation request with the World Trade Organization (WTO), challenging the latest US levies. Retaliatory measures from affected countries have further clouded the global economic outlook, reinforcing gold’s appeal as a hedge against market instability.
Dollar Weakness and Fed Rate Cut Bets Support Gold
The US dollar struggled to gain momentum, providing further support for gold prices. Traders are closely watching the upcoming US non-farm payrolls (NFP) report, which could shape expectations for the Federal Reserve’s next policy moves.
Private sector employment growth slowed to a seven-month low, fueling speculation that the Fed may lean toward further rate cuts to cushion the economy. However, a surprising rebound in the US services sector has suggested pockets of economic resilience, potentially complicating the Fed’s decision-making process.
Technical Analysis
Gold (XAU/USD) is trading at $2,924.17, up 0.21% for the session. The price tested a low of $2,894.40 before rebounding sharply toward $2,929.94, which now serves as the nearest resistance level. The moving averages (5, 10, 30) indicate consolidation, with price action stabilizing around key levels. The MACD is turning positive, suggesting that bullish momentum is gradually building.
Picture: Gold steadies near $2,924, eyeing a breakout above $2,930, as seen on the VT Markets app
For further upside, a breakout above $2,930 could lead to a test of $2,940 – $2,950, where sellers may re-emerge. On the downside, support remains firm at $2,894, and a break below this level could trigger declines toward $2,880.
If economic uncertainty persists and the dollar remains under pressure, gold could test new highs. However, any signs of trade de-escalation or stronger-than-expected US economic data could limit further gains.
