Gold price (XAU/USD) builds on the steady intraday ascent through the first half of the European session and climbs back closer to the top end of its weekly range. The US Dollar (USD) selling bias remains unabated in the wake of rising bets that the Federal Reserve (Fed) will cut interest rates several times in 2025 amid worries about slowing US economic growth. This keeps the USD depressed near a multi-month low and turns out to be a key factor acting as a tailwind for the non-yielding yellow metal.
Moreover, the uncertainty surrounding US President Donald Trump's trade policies and their impact on the global economy turns out to be another factor underpinning the safe-haven Gold price. The XAU/USD pair, however, remains confined in a multi-day-old range as traders now seem reluctant and opt to wait for the release of the crucial US Nonfarm Payrolls (NFP) report – before placing directional bets. Nevertheless, the bullion remains on track to register strong weekly gains amid a bearish USD.
Daily Digest Market Movers: Gold price attract dip-buyers amid trade war fears, economic uncertainty and weaker USD
Mounting worries over the potential impact of US President Donald Trump's trade tariffs on the US economy keep the US Dollar depressed near its lowest level since November 11 and should act as a tailwind for the Gold price.
The uncertainty surrounding Trump's trade policies, especially after another U-turn on the recently imposed tariffs on Mexico and Canada, continues to weigh on investor sentiment and could support the safe-haven precious metal.
Trump on Thursday exempted goods from both Canada and Mexico that comply with the US–Mexico–Canada Agreement for a month from the steep 25% tariffs, which went into effect earlier this week on Tuesday.
Traders have been pricing in the possibility of further policy easing by the Federal Reserve amid concerns about an economic slowdown in the US, which further undermines the USD and benefits the non-yielding yellow metal.
Philadelphia Fed President Patrick Harker on Thursday flagged growing threats to economic growth and risks to the inflation outlook, though acknowledged that the economy appears to be growing, with still low unemployment.
Separately, Atlanta Fed President Raphael Bostic noted that the US economy is in incredible flux and it's hard to know where things will land. The central bank needs to be mindful of any changes that impact prices and employment.
Meanwhile, Fed Governing Board Member Christopher Waller said he leans strongly against a rate cut at the March meeting, although he reckons cuts later in the year remain on track if inflationary pressures continue to abate.
On the economic data front, the US Initial Jobless Claims fell more than expected, to 221K during the week ended March 1, though it failed to provide any respite to the USD bulls or influence the XAU/USD pair.
Traders keenly await the release of the crucial US Nonfarm Payrolls (NFP) report, which is expected to show that the economy added 160K new jobs in February and the Unemployment Rate held steady at 4%.(Newsmaker23)
Sumber: FXstreet
