Gold (XAU/USD) edged lower to around $2,880 per ounce during Monday’s early Asian session as traders engaged in profit-taking. However, lingering concerns over a potential global trade war, driven by former US President Donald Trump’s push for reciprocal tariffs, may help limit losses for the precious metal.
Gold’s upside remains capped as the Trump administration delays implementing its tariff proposals. On Thursday, Trump signed a presidential memorandum outlining plans for reciprocal tariffs on foreign nations but postponed enforcement while negotiating terms on a case-by-case basis. The reduced immediate threat of a trade war has weighed on gold, a traditional safe-haven asset.
Market participants will closely monitor further developments in Trump’s tariff policies, as any escalation in trade tensions could drive investors toward gold.
Meanwhile, weaker US economic data has pressured the US Dollar (USD), potentially offering some support for dollar-denominated commodities. The US Census Bureau reported Friday that retail sales declined by 0.9% in January, a sharp contrast to December’s revised 0.7% increase and well below market expectations of a 0.1% drop.
