Gold (XAU/USD) has been trading sideways during the Asian session on Thursday, continuing its consolidative price movement for the second consecutive day. Investors remain cautious as concerns about US President Donald Trump’s tariff measures persist, bolstering demand for the safe-haven metal. Additionally, the weakening US Dollar (USD) and rising expectations of a potential interest rate cut by the Federal Reserve have provided further support to gold prices.
However, a generally optimistic tone in equity markets is limiting bullish momentum in gold. Traders are also adopting a wait-and-see approach, awaiting the release of key US economic data, including the Nonfarm Payrolls (NFP) report on Friday. Meanwhile, the weekly Initial Jobless Claims report from the US could provide some short-term market direction later in the North American session. Despite this, the fundamental outlook suggests that the overall trend for XAU/USD is likely to be upward.
Market Movers: Gold Trading Pauses Ahead of NFP Data
Gold’s performance remains influenced by ongoing concerns surrounding trade tensions and the broader US economic outlook. Trump’s imposition of a 25% tariff on most imports from Mexico and Canada, alongside a hike in duties on Chinese goods, has raised fears of a prolonged trade war. In response, Canada and China have announced retaliatory tariffs on US products, adding to the uncertainty.
The tariffs have sparked fears that US economic growth could slow, prompting expectations that the Federal Reserve may reduce interest rates multiple times later this year. These fears were further fueled by the February ADP report, which showed that US private sector employment growth came in at just 77,000, well below the anticipated 140,000.
Despite these concerns, the US service sector continued to show expansion in February, though it failed to lift confidence in the US Dollar. The USD Index (DXY) fell to its lowest level since December 2024, contributing to the upward momentum in gold during Thursday’s trading session.
In response to ongoing trade tensions, the White House also announced a one-month delay for US automakers to comply with the US-Mexico-Canada Agreement, further encouraging risk appetite and dampening demand for safe-haven assets like gold. As a result, traders are holding back from placing significant bullish bets on gold as they await the release of the key Nonfarm Payrolls data on Friday.
Technical Outlook: Gold Faces Resistance Near $2,934
From a technical perspective, gold is currently facing resistance around the $2,934 level. A break above this immediate hurdle could push prices toward the all-time high of $2,956, touched in February. Continued buying momentum could trigger further bullish activity, supporting the ongoing uptrend.
However, a lack of follow-through buying may warrant caution, and any pullback in prices could present a buying opportunity near the $2,900 level. In the event of a deeper correction, key support levels lie at $2,884-2,883, followed by the $2,860-2,858 zone.
As traders continue to monitor developments in the global economy, gold’s price action will largely depend on upcoming economic data, particularly the US Nonfarm Payrolls report, which is expected to provide more clarity on the strength of the US labor market and the potential for future Federal Reserve policy changes.
