- Gold price regains positive traction as trade-related uncertainties boost safe-haven assets.
- The USD struggles to attract any follow-through buying despite the Fed’s hawkish pause.
- Bulls seem unaffected by a positive risk tone, which tends to undermine the XAU/USD pair.
Gold price (XAU/USD) is maintaining its upward momentum during Thursday’s Asian trading session, hovering around the $3,400 level. Renewed concerns surrounding international trade relations are bolstering demand for the precious metal as a safe-haven asset. Recent statements from US President Donald Trump have dampened expectations for a swift resolution to the ongoing trade dispute with China, indicating a lack of urgency to finalize any agreements. This, coupled with persistent geopolitical tensions arising from the conflict in Ukraine, instability in the Middle East, and heightened military activity on the India-Pakistan border, is providing support for the bullion’s price, pushing it closer to the two-week high reached on Wednesday. Investors are closely monitoring these geopolitical developments, as they tend to increase risk aversion and drive capital towards safer investments like gold.
Concurrently, the US Dollar (USD) is facing renewed selling pressure, partially reversing the gains made overnight following the Federal Reserve’s (Fed) recent policy announcement, which was perceived as a hawkish pause. The Fed signaled its intent to maintain a restrictive monetary policy stance to combat inflation, but the dollar’s inability to sustain its upward trajectory suggests that market participants are reassessing the economic outlook. This dollar weakness is contributing to the upward pressure on the gold price. However, a generally positive risk sentiment in the broader market is preventing gold bulls from adopting a more aggressively bullish stance. Despite this, the underlying fundamental factors suggest that the path of least resistance for the XAU/USD pair is skewed to the upside. Market participants are now awaiting the release of the latest US Initial Jobless Claims data and any further announcements from President Trump regarding potential trade deals, which could provide short-term trading opportunities. Analysts anticipate that the jobless claims data will offer insights into the strength of the labor market, while any developments on the trade front could significantly impact market sentiment.
