Gold Steadies as Traders Await Fed, Trump’s Tariffs.
Gold prices remain stable as traders assess US economic signals, President Trump’s tariff policies, and the Federal Reserve’s stance on interest rates. With the Fed’s March 19 meeting approaching, investors are looking for clarity on monetary policy and market direction.
Gold Holds Near $2,900
Gold (XAUUSD) is consolidating near the $2,900 level, reflecting a cautious market sentiment. Investors are weighing multiple factors, including U.S. economic growth, inflation, and Fed rate expectations. With no immediate rate cuts expected, gold is trading within a narrow range.
Trump’s Tariffs & Economic Outlook
President Trump, in a recent Fox News interview, described the U.S. economy as in a “transition” phase. While he avoided calling it a recession, many analysts believe growth is slowing. His focus on tariffs and federal job cuts could impact inflation and economic stability.
If tariffs raise costs, inflation could stay high, limiting the Fed’s ability to cut rates. However, if tariffs slow economic growth, the Fed may be forced to ease policy sooner, benefiting gold.
Fed’s Cautious Stance
Fed Chair Jerome Powell, ahead of the March 19 meeting, signaled no urgency to change interest rates. He emphasized that keeping rates steady is a low-risk approach compared to making a premature move.
Market expectations remain strong for a rate cut later in the year. The CME FedWatch Tool shows a 97% chance of no change in March but an 81.8% chance of a cut by June. Lower rates typically boost gold by reducing the opportunity cost of holding the metal.
Economic Data Shows Weakness
Recent data suggests a slowing U.S. economy. The Atlanta Fed’s GDPNow model predicts contraction this quarter, raising recession fears. A weak economy could push the Fed to cut rates, driving gold demand higher.
XAU Technical Outlook
Gold is trading in a tight range, with resistance at $2,920 and support at $2,880. A breakout above $2,920 could push prices toward $2,950 or higher, while a drop below $2,880 may signal a short-term correction.
Gold & Market Trends
Bond Yields: U.S. Treasury yields are off their lows, reflecting uncertainty. Lower yields would support gold.
Stock Market: Volatility persists. A market selloff could boost gold as a safe haven.
US Dollar A weaker dollar supports gold, while a stronger dollar limits gains.
Geopolitical Risks & Safe-Haven Demand
Global tensions, trade conflicts, or political instability could drive XAU demand. If U.S.-China trade relations worsen or conflicts escalate, investors may turn to gold for security.
Investor Strategy
1. Watch the Fed: The March 19 meeting could provide key policy signals.
2. Track Data: GDP, inflation, and job reports will impact Fed decisions and gold prices.
3. Monitor Geopolitics: Rising uncertainty boosts safe-haven demand.
4. Follow Technical Levels: A breakout above $2,920 signals upside, while a drop below $2,880 suggests correction.
Conclusion
XAU is in wait-and-see mode as traders look for clarity from the Fed and Trump’s policies. While no rate change is expected in March, markets anticipate a cut by June. Economic weakness and geopolitical risks could drive XAU higher, but for now, traders remain cautious.
https://voiceoftraders.com/analysis/australian-dollar-stays-strong-as-rba-holds-rates
