Daily Price Outlook
Gold price (XAU/USD) failed to break its consolidating phase and remains under pressure around the $2,901 level in early European trading session on Monday.
The metal is struggling to gain strong momentum despite support from a weaker US dollar and ongoing global uncertainties.
However, the concerns over the economic impact of US President Donald Trump’s trade tariffs and the risk of a global trade war continue to push investors toward safe-haven assets like gold. Nevertheless, the market remains cautious, and buying interest has been limited.
Meanwhile, the weaker US jobs report has increased expectations that the Federal Reserve will cut interest rates multiple times this year.
Hence, the softer labor market and anticipated policy easing have weighed on the US dollar, keeping it near its lowest level since November.
This has provided some support to gold prices, but the metal remains trapped in a tight range, unable to sustain a breakout.
Uncertainty Over Trump’s Tariffs and Fed Policy Outlook Weigh on Investor Sentiment
Despite the upbeat sentiment in the market, investor sentiment remains on edge due to the uncertainty surrounding US President Trump’s protectionist tariffs.
These tariffs could slow down US economic growth and potentially force the Federal Reserve to resume rate cuts in June.
Recently, Trump expressed uncertainty about upcoming tariffs on Canada, saying they may or may not be implemented on Monday or Tuesday.
This came after a temporary one-month waiver of the 25% tariffs on Canadian and Mexican goods, which was part of the US-Mexico-Canada Agreement.
Consequently, the ongoing uncertainty surrounding trade policies is keeping investors cautious, and they are closely monitoring any further developments. The situation could influence economic growth projections and the Fed’s next moves, adding to market volatility.
On the Fed front, Chair Jerome Powell emphasized on Friday that the economic impact of Trump’s policies is still uncertain.
Meanwhile, San Francisco Fed President Mary Daly mentioned that growing uncertainty among businesses could slow US economic growth but doesn’t yet require an immediate change in policy.
Despite these comments, markets are expecting the Federal Reserve to make three rate cuts of 25 basis points each before the year ends.
This expectation continues to weigh on the US Dollar, creating a bearish outlook and indirectly boosting support for gold prices.
Weaker US Jobs Report Weighs on USD, Supporting Gold But Limiting Momentum
On the data front, the Nonfarm Payrolls (NFP) report revealed that the US economy added 151,000 jobs in February, falling short of the expected 160,000.
Meanwhile, January’s job growth was revised down to 125,000 from the previous 143,000. The unemployment rate unexpectedly increased to 4.1% from 4.0%, raising concerns about a potential slowdown in the labor market.
As a result of the weaker jobs report, US Treasury bond yields have dropped, putting more pressure on the US Dollar. Despite these factors helping gold, the metal remains stuck in a narrow range and is struggling to gain momentum.
GOLD (XAU/USD) – Technical Analysis
Gold prices are holding steady at $2,913.19, reflecting a marginal decline amid cautious market sentiment. The metal has struggled to break above key resistance, with technical indicators suggesting a near-term consolidation phase before a potential breakout.
The pivot point at $2,902.47 is acting as a crucial intraday level, offering a strong base of support. Immediate resistance is identified at $2,929.94, with further hurdles at $2,942.57 and $2,954.43.
If bullish momentum builds, gold could challenge these levels, signaling a continuation of its uptrend. Conversely, support is firm at $2,884.54, with further downside protection at $2,872.63 and $2,858.99. A break below these levels may trigger a deeper correction.
From a technical perspective, gold remains above its 50-day EMA at $2,913.19, reinforcing the bullish trend. However, price action near this level suggests a tug-of-war between buyers and sellers, with the market awaiting a catalyst for directional movement.
If gold sustains a move above $2,913, bullish momentum could push prices toward $2,930, while a failure to hold this level may lead to a test of lower supports.
In conclusion, gold’s near-term trajectory hinges on its ability to maintain support above $2,913. A buy position above $2,913 remains favorable, targeting $2,930, with a stop-loss at $2,905 to mitigate downside risk.
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