Gold Market Remains Steady Despite Tariff Easing, Fed Rate Cut Speculations
Gold maintains its consolidation phase, retaining its weekly gains as market forces adjust due to easing tariff tensions and Federal Reserve rate cut speculations. The Trump administration’s move to exempt Mexican and Canadian imports from new tariffs derailed briefly the bullion rally, as traders now target the forthcoming Nonfarm Payrolls report. Fed official Christopher Waller foreshadowed possible rate reductions later this year, in accordance with market forecast. In addition, tensions continue between the U.S. and China, while Bitcoin’s weakness after a reserve announcement contributes to market uncertainty. With gold lingering around $2,917, important technical benchmarks reflect a cautionary but upbeat attitude, with traders weighing macroeconomic signals in anticipation of the next major development. KEY LOOKOUTS • Fed official Christopher Waller hinted at two or three rate cuts this year, with June being a potential turning point for monetary policy. • Traders closely watch Friday’s U.S. jobs data, as a strong report could delay rate cuts, impacting gold’s demand as a safe-haven asset. • The Trump administration’s exemption of Mexico and Canada from new tariffs influenced market sentiment, and future trade policy changes could impact gold prices. • Gold fluctuates around $2,917, while support lies at $2,928 and resistance at $2,900; breaking these points may initiate immense price action. Gold traders are on tenterhooks as prime macroeconomic and geopolitical events influence investor sentiment. The possibility of rate cuts by the Federal Reserve, indicated by Christopher Waller, continues to propel bullion, with June being a turning point. Investors keenly await the U.S. Nonfarm Payrolls report, which might impact Fed policy and affect the safe-haven demand for gold. The Trump administration’s announcement of exempting Mexico and Canada from new tariffs temporarily halted the rally in gold, but other trade policy changes may spark renewed volatility. Gold technically trades at $2,917, with resistance at $2,928 and solid support at $2,900, and these levels will be vital to short-term price action. Gold consolidates near $2,917 as traders eye key market drivers, including potential Fed rate cuts and the upcoming U.S. Nonfarm Payrolls report. The Trump administration’s tariff exemption for Mexico and Canada briefly stalled bullion’s rally. • Gold remains steady near $2,917, consolidating gains for the third consecutive day amid shifting market dynamics. • Fed member Christopher Waller hints at two or three rate reductions in 2024, and June as a critical decision time. • Friday’s U.S. jobs data are awaited by traders, which may impact Fed policy and the safe-haven demand for gold. • The Trump administration’s move to exempt Mexico and Canada from new tariffs temporarily halted the rally in gold. • Bitcoin fell below $90,000 following President Trump’s strategic Bitcoin reserve plan which failed to impress investors. • Australia shipped a record $2.9 billion in gold to the U.S. in January due to concerns about possible tariffs. • Gold’s key support lies at $2,900, and resistance levels at $2,928 and $2,945 will chart its next direction. Gold continues to consolidate while market players are weighing global economic events and policy changes. The Federal Reserve’s position on whether there will be rate cuts remains an important determinant, with Christopher Waller predicting two or three cuts this year. This coincides with the expectations of markets, particularly in light of the continued focus on inflationary pressure and labor markets. The U.S. Nonfarm Payrolls release on Friday is also seen to shed some light on the economy’s robustness, something that could feed into future decisions on monetary policy. XAU/USD Daily Price Chart Chart Source: TradingView At the same time, geopolitical and trade events also influence market sentiment. The Trump administration’s move to exempt Mexico and Canada from fresh tariffs temporarily dented investor sentiment, while US-China tensions remain a source of uncertainty. Recent record-high gold exports from Australia to the U.S. show the sustained demand for the metal in the wake of global trade tensions. Moreover, the surprise decline of Bitcoin after news of a strategic reserve highlights the volatility of the wider financial markets, potentially with an indirect impact on investor sentiment towards safe-haven assets such as gold. TECHNICAL ANALYSIS Gold continues to be in a state of consolidation, with the main technical levels dictating short-term price direction. Trading at around $2,917 currently, the metal finds immediate resistance at $2,928, with further up potential towards $2,945 as long as bullish pressure gains momentum. On the negative side, the psychological support of $2,900 continues to be important, serving as a buffer against falls. A fall below this level might open further downside to $2,874, where more buying interest could come in. Though the overall trend is still supportive based on hopes for future rate cuts, gold might need a new catalyst to move out of its present range and try to reach its all-time high of $2,956. FORECAST The bullish momentum in gold could gain strength if the Federal Reserve indicates more aggressive rate cuts in future meetings. A dovish bias, combined with economic uncertainty, might propel demand for the precious metal as a safe-haven. If gold is able to break above the $2,928 resistance level, it might set the stage for a move towards $2,945. A subsequent rally might challenge the all-time high of $2,956, particularly if geopolitical tensions or inflation worries return, making investors more interested in bullion. On the other hand, if future economic statistics, led by the U.S. Nonfarm Payrolls release, paint a robust picture of the jobs market, that could temper hope of early cuts, putting bearish pressure on gold. Breaking below the psychological $2,900 support would possibly set further declines in motion, with the next significant level of support found at $2,874. A firmer U.S. dollar or higher bond yields may also keep gold prices down, and that could trigger a possible retest of lower prices if positive momentum is lost.
