Gold price bulls hesitate amid a positive risk sentiment, but trade war concerns may cap losses

Gold price (XAU/USD) remains range-bound, struggling to gain significant traction and trading just below the weekly low in the early European session on Thursday. Concerns over US President Donald Trump's tariff policies continue to support the safe-haven appeal of gold. Additionally, a weaker US Dollar (USD) and increasing speculation of an earlier-than-expected Federal Reserve (Fed) rate cut further bolster demand for the non-yielding metal.

However, a broadly positive sentiment in equity markets limits fresh bullish positions on gold. Investors remain cautious ahead of Friday’s US Nonfarm Payrolls (NFP) report, opting to wait for clearer market direction. Meanwhile, the Weekly Initial Jobless Claims data from the US could offer some short-term impetus during the North American session. Despite these mixed signals, the overall fundamental outlook suggests that the path of least resistance for XAU/USD remains tilted to the upside.

Daily Market Movers: Gold Price Consolidates Amid Mixed Fundamentals

• US President Donald Trump’s 25% tariffs on most imports from Mexico and Canada took effect on Tuesday, alongside the doubling of duties on Chinese goods to 20%.
• Canada retaliated with tariffs on over $100 billion worth of US products, while China imposed tariffs of up to 15% on various US agricultural exports.
• In his first address to the US Congress, Trump warned of additional tariffs, including "reciprocal tariffs" set to take effect on April 2, heightening trade war fears.
• Investors are concerned that Trump’s tariff policies could slow US economic growth, increasing expectations that the Federal Reserve may implement multiple rate cuts this year.
• These expectations were reinforced by the ADP report, which showed US private sector employment grew by just 77K in February, falling short of the 140K forecast.
• Despite this, US service sector activity expanded at an accelerated pace, though it failed to provide significant support for US Dollar bulls.
• The USD Index (DXY) fell to its lowest level since December 2024, offering a tailwind for gold during the Asian session on Thursday.
• The White House announced a one-month delay for US automakers to comply with the US–Mexico–Canada Agreement, easing concerns over immediate trade disruptions.
• This delay boosted risk appetite, limiting safe-haven demand for gold and preventing traders from placing aggressive bullish bets on XAU/USD.
• Investors now await the release of Weekly Initial Jobless Claims for short-term direction, though the primary focus remains on Friday’s US Nonfarm Payrolls report.

Gold Price Bulls Hold Steady, Awaiting a Break Above $2,934

From a technical standpoint, a sustained move beyond the $2,934 resistance could propel gold toward its all-time high of $2,956, last reached in February. A decisive breakout may serve as a bullish catalyst, reinforcing the multi-month uptrend, supported by positive momentum indicators on the daily chart.

However, the absence of strong follow-through buying calls for caution before anticipating further gains. Any pullback is likely to be viewed as a buying opportunity near the $2,900 level, with downside risks remaining limited. A deeper correction, however, could expose gold to support around $2,884-2,883, with further declines potentially testing the $2,860-2,858 zone.