Gold prices (XAU/USD) saw a boost in the early Asian session on Monday, reaching approximately $2,915, as concerns over global instability and trade tensions between the US and its allies continue to provide support for the precious metal.
Last week, President Donald Trump issued an executive order that temporarily exempted goods from Canada and Mexico under the newly negotiated USMCA trade agreement, reversing a decision made only days earlier. However, US Commerce Secretary Howard Lutnick announced on Sunday that the 25% tariffs on steel and aluminum imports, set to take effect on Wednesday, will likely remain in place, adding to the uncertainty surrounding the Trump administration’s trade policies. This environment of instability has sparked increased demand for safe-haven assets like gold.
In addition, recent US labor market data has added to the pressure on the US Dollar. February’s Nonfarm Payrolls (NFP) report, released by the US Bureau of Labor Statistics (BLS) on Friday, showed a modest increase of 151,000 jobs, below the market expectation of 160,000. January’s NFP growth was also revised down to 125,000 from 143,000. The report also revealed that the unemployment rate ticked up to 4.1% from 4.0%, while annual wage growth increased to 4.0% from 3.9%, supporting the Federal Reserve’s anticipated rate cuts later this year. This shift is expected to weigh on the US Dollar and elevate the price of USD-denominated commodities like gold.
As global trade tensions and economic data suggest a slowdown, gold remains a favorable hedge against volatility and uncertainty in the near term.
