Gold prices rise amid stronger safe-haven demand, with focus on upcoming ISM Services PMI data

Gold (XAU/USD) continued its winning streak for the third consecutive day on Wednesday, supported by increased safe-haven demand following the implementation of US tariffs. However, rising US Treasury yields posed challenges for the non-yielding metal, limiting its upside momentum.

Trade tensions escalated as Trump’s 25% tariffs on Mexican and Canadian imports took effect on Tuesday, alongside a tariff hike on Chinese goods to 20%, prompting retaliatory measures. Investors now shift their attention to key US economic data releases, including the ISM Services PMI and ADP Employment Change, scheduled for the North American session.

Meanwhile, US Commerce Secretary Howard Lutnick suggested in a Fox News interview that Trump might reconsider his tariff policy within 48 hours of its implementation, provided that USMCA regulations are adhered to. However, The New York Times reported that Trump has privately indicated his intention to maintain the tariffs.

Gold also found support as geopolitical concerns intensified, following the US decision to pause military aid to Ukraine. According to Bloomberg, a defense official stated that all US military equipment not yet in Ukraine— including weapons in transit via aircraft and ships, as well as those awaiting transfer in Poland— would be held back. Tensions between US President Donald Trump and Ukrainian leader Volodymyr Zelenskyy escalated on Friday during peace negotiations.

Additionally, President Trump delivered a joint session address at the Capitol Building in Washington, DC, on Wednesday, marking his first Congressional speech since returning to office.

Gold Price Dips as US Treasury Yields Rise, Trade Tensions Support Safe-Haven Demand

• The US Dollar Index (DXY), which tracks the USD against six major currencies, trades around 105.70, edging higher as US Treasury yields rise, with the 2-year and 10-year yields standing at 3.98% and 4.25%, respectively.
• However, the USD faces downward pressure amid concerns over slowing economic growth and the potential impact of tariffs. Markets speculate that President Trump may backtrack on his tariff threats.
• US Commerce Secretary Howard Lutnick suggested in a Fox News interview that Trump might reconsider his tariff policy within 48 hours of implementation if USMCA rules are followed. The 25% tariffs on Canadian and Mexican goods took effect Tuesday, alongside a tariff hike on Chinese imports to 20%.
• In response, Canada confirmed retaliatory tariffs on US imports, while China’s Commerce Ministry announced additional duties of up to 15% on key US farm products.
• Escalating trade tensions heighten the risk of a global trade war, dampening investor sentiment. This uncertainty may bolster safe-haven demand for gold, helping limit further losses despite the bearish pressure from a stronger US dollar.
• Meanwhile, the ISM Manufacturing PMI fell to 50.3 in February from 50.9, while the Prices Paid Index surged to a nearly three-year high, reflecting concerns over import duties.
• Fears that Trump’s trade policies could weaken consumer spending and weigh on economic growth may further support the XAU/USD pair in the near term.
  
  

Technical Analysis: Gold Holds Key Support at $2,900 Near Nine-Day EMA

Gold price (XAU/USD) is trading around $2,910 per troy ounce on Wednesday, consolidating within an ascending channel pattern, which keeps the bullish bias intact. Technical analysis of the daily chart indicates that the 14-day Relative Strength Index (RSI) remains above 50, reinforcing a positive outlook for the metal.

XAU/USD could target its primary resistance at the all-time high of $2,956, recorded on February 24.

On the downside, immediate support is seen at the nine-day Exponential Moving Average (EMA) of $2,902. A break below this level could weaken short-term momentum, potentially driving the price toward the lower boundary of the ascending channel near $2,583.