Gold price moves away from multi-week low set on Monday; climbs to $3,000 mark

Gold price attracts some dip-buyers as worries over US tariffs revive safe-haven demand.

Bets for more aggressive Fed rate cuts weigh on the USD and also benefit the commodity.

A slight recovery in the global risk sentiment might cap further gains for the XAU/USD pair.

Gold price (XAU/USD) regains some positive traction during the Asian session on Tuesday and for now, seems to have snapped a three-day losing streak from a nearly four-week low, around the $2,957-2,956 area touched the previous day. US President Donald Trump's sweeping reciprocal tariffs announced last week sparked concerns about a global trade war, which could push the world economy into a recession. The uncertainty continues to underpin demand for safe-haven assets and assists the bullion in stalling a sharp retracement slide from the record high touched last Thursday.

Meanwhile, traders continue to ramp up their bets for multiple interest rate cuts by the Federal Reserve (Fed) in 2025 amid worries over a tariff-driven US economic slowdown. This keeps a lid on the recent US Dollar (USD) recovery from a multi-month low and turns out to be another factor lending support to the non-yielding Gold price. That said, a slight improvement in the global risk sentiment could act as a headwind for the commodity. Traders might also opt to wait for FOMC meeting minutes and the US consumer inflation figures, due on Wednesday and Thursday, respectively.

Daily Digest Market Movers: Gold price attracts some safe-haven flows amid renewed USD selling

• Investors remain worried that US President Donald Trump’s latest trade tariffs would trigger an all-out global trade war and negatively impact the world economy. This, along with the emergence of fresh US Dollar selling, helps revive demand for the safe-haven precious metal during the Asian session on Tuesday.

• Market participants now seem convinced that the Federal Reserve will resume its rate-cutting cycle soon amid worries about the potential economic fallout from Trump's aggressive trade policies. Moreover, Trump called for the Fed to cut interest rates as soon as possible, arguing that the US economy was in a strong position.

• Fed Governor Adriana Kugler said on Monday that the US central bank's focus should be on keeping inflation in check and noted that short-term inflation expectations have risen but remain well-anchored in the longer term. She further added that Fed policymakers are still committed to the 2% inflation target.

• Separately, Chicago Fed President Austan Goolsbee said that a global trade war eruption may lead to a consumer behavior shift. If tariffs are as large as announced, with counter-tariffs, they could lead to supply disruptions, and high inflation, Goolsbee added further, though it does little to dent Fed rate cut expectations.

• In fact, the current market pricing indicated the possibility that the US central bank could again lower borrowing costs at the June policy meeting and deliver at least four rate cuts by the year-end. This fails to assist the USD in building on its recovery gains registered over the past two days and benefits the non-yielding Gold price.

• Traders will closely monitor minutes from the Fed's latest policy meeting, scheduled for release on Wednesday. Apart from this, the US Consumer Price Index on Thursday and the Producer Price Index on Friday should provide cues about the future rate-cut path. This, in turn, will influence the USD and the XAU/USD pair.

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Gold price might confront a stiff barrier near $3,020 amid negative technical setup on the daily chart

From a technical perspective, oscillators on the daily chart have just started gaining negative traction. However, the overnight bullish resilience near the 61.8% Fibonacci retracement level of the February-April rally and the subsequent move-up warrants caution for bearish traders. The mixed setup suggests that the Gold price might continue to find some support near Monday’s swing low, around the $2,957-2,956 area. This is closely followed by the 50-day Simple Moving Average (SMA), currently pegged near the $2,948-2,947 region. A convincing break below the latter will set the stage for an extension of the recent sharp pullback from the all-time peak touched last Thursday.

On the flip side, any further move up is more likely to confront stiff resistance near the $3,020 horizontal zone, above which the Gold price could climb to the $3,055-3,056 horizontal barrier. Some follow-through buying will be seen as a fresh trigger for bullish traders and allow the XAU/USD to aim towards reclaiming the $3,100 mark, with some intermediate hurdle near the $3,075-3.080 region.