Gold price rallies back closer to $2,920 area amid renewed USD selling
- Gold price regains positive traction amid the rising risk of a global trade war.
- The USD languishes near a two-month low and further benefits the XAU/USD.
- Bets that the Fed would keep rates higher for longer might cap the precious metal.
Gold price (XAU/USD) builds on its steady intraday ascent and touches a fresh daily high, around the $2,918-2,919 region during the first half of the European session on Tuesday. This marks the second day of a positive move for the commodity and is sponsored by concerns about the economic fallout from US President Donald Trump's trade tariffs, which could trigger a global trade war. Apart from this, persistent geopolitical risks turn out to be another factor underpinning the safe-haven bullion.
Meanwhile, expectations that Trump's trade tariffs would undermine consumer spending continue to fuel concerns about the outlook for the world’s largest economy. This, in turn, keeps the US Dollar (USD) depressed near its lowest level in over two months touched last week, and contributes to the bid tone surrounding the Gold price for the second straight day. However, bets that the Federal Reserve (Fed) will keep rates higher for longer might keep a lid on any further gains for the non-yielding yellow metal.
Daily Digest Market Movers: Gold price continues to benefit from trade war fears and weaker USD
- Investors remain worried that US President Donald Trump's trade tariffs would increase price pressures and allow the Federal Reserve to stick to its hawkish stance, prompting some selling around the Gold price on Tuesday.
- Trump's tariffs on Mexico and Canada are taking effect this Tuesday, along with a new 10% levy on Chinese goods. Trump also said that reciprocal tariffs would take effect on April 2 on countries that impose duties on US products.
- Canada confirmed that it will impose retaliatory tariffs on US imports. China’s Commerce Ministry announced on Tuesday that it will slap additional tariffs of up to 15% on imports of key farm products from the US.
- This raises the risk of a global trade war and weighs on investors' sentiment, which should act as a tailwind for the safe-haven precious metal and help limit any deeper losses amid a bearish tone surrounding the US Dollar.
- The Institute for Supply Management's (ISM) Manufacturing PMI slipped to 50.3 in February from 50.9 in the previous month, while the Prices Paid Index jumped to a nearly three-year high amid worries about duties on imports.
- This comes on top of worries that Trump's trade tariffs would undermine consumer spending and fuel concerns about the outlook for the world’s largest economy. This could further lend support to the XAU/USD pair.
- Ukrainian President Volodymyr Zelenskiy's meeting with Trump ended in disaster on Friday. Furthermore, a White House official confirmed that the US has paused military aid to Ukraine, adding to the uncertainty in markets.
- The market focus will remain glued to the release of the US monthly employment details – popularly known as the Nonfarm Payrolls (NFP) report on Friday. The crucial data would influence the USD and the yellow metal.
Gold price could extend the positive move further towards the $2,933-2,934 resistance zone
From a technical perspective, failure ahead of the $2,900 mark warrants some caution for bullish traders. That said, oscillators on the daily chart – though they have been losing traction – are holding in positive territory and support prospects for the emergence of some dip-buyers near the $2,860 immediate support. This is followed by the multi-week low, around the $2,833-2,832 region touched last Friday, below which the Gold price could accelerate the fall further towards the $2,800 round figure.
On the flip side, bulls might wait for sustained strength and acceptance back above the $2,900 mark before placing fresh bets. The subsequent move up could lift the Gold price to the $2,934 intermediate hurdle en route to the record high, around the $2,956 region touched last Monday.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.37% | -0.19% | -0.16% | -0.43% | 0.20% | -0.04% | -0.50% | |
| EUR | 0.37% | 0.18% | 0.24% | -0.06% | 0.58% | 0.33% | -0.15% | |
| GBP | 0.19% | -0.18% | 0.04% | -0.25% | 0.39% | 0.14% | -0.31% | |
| JPY | 0.16% | -0.24% | -0.04% | -0.26% | 0.37% | 0.12% | -0.33% | |
| CAD | 0.43% | 0.06% | 0.25% | 0.26% | 0.63% | 0.40% | -0.07% | |
| AUD | -0.20% | -0.58% | -0.39% | -0.37% | -0.63% | -0.24% | -0.74% | |
| NZD | 0.04% | -0.33% | -0.14% | -0.12% | -0.40% | 0.24% | -0.45% | |
| CHF | 0.50% | 0.15% | 0.31% | 0.33% | 0.07% | 0.74% | 0.45% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
