Gold price edges lower on Friday amid some repositioning ahead of the crucial US NFP release.
Rising trade tensions, the risk-off mood, and a weaker USD lend support to the precious metal.
Bets for more interest rate cuts by the Fed contribute to limiting losses for the XAU/USD pair.
Gold price trades with a mild negative bias for the second successive day on Friday, though it lacks follow-through selling and remains confined in a multi-day-old trading range. The intraday downtick could be attributed to some repositioning trade ahead of the closely-watched US monthly employment details due later during the North American session. The popularly known Nonfarm Payrolls (NFP) report will play a key role in influencing the near-term US Dollar (USD) price dynamics and provide a fresh directional impetus to the commodity.
Heading into the key data risk, bets that the Federal Reserve (Fed) could cut rates multiple times in 2025 amid worries about a slowing US economic growth keep the USD depressed near a multi-month low touched on Thursday. Apart from this, persistent worries about US President Donald Trump's trade policies and the risk-off mood might continue to act as a tailwind for the safe-haven Gold price. This, in turn, warrants some caution for bearish traders and makes it prudent to wait for strong follow-through selling before positioning for any further losses.
Daily Digest Market Movers: Gold price traders keenly await the US NFP report before placing fresh directional bets
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%.
Gold price needs to find acceptance below $2,900 mark to back prospects for a meaningful drop
From a technical perspective, the Gold price has been showing resilience below the $2,900 round figure, warranting caution for bearish traders amid still positive oscillators on the daily chart. Acceptance below the said handle, however, could drag the XAU/USD to the $2,860-2,858 horizontal zone with some intermediate support near the $2,884-2,883 region. The downward trajectory could extend further towards last week's swing low, around the $2,833-2,832 area before the commodity eventually drops to the $2,800 mark.
On the flip side, the $2,926-2,930 zone now seems to have emerged as an immediate hurdle, above which the Gold price could aim to retest the all-time peak, around the $2,956 region touched in February. Some follow-through buying would be seen as a fresh trigger for bullish traders and pave the way for the resumption of the recent well-established uptrend witnessed over the past three months or so.
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
