Gold price was up by 0.3% in the New York session on Wednesday as risk sentiment thawed following indications that US President Donald Trump could compromise his hard tariff stance. The yellow metal traded at $2,929 in the spot market as traders digested Commerce Secretary Howard Lutnick’s statement in a TV interview that Trump was ready to reach a middle ground with Canada and Mexico to ease the impasse caused by the trade tariffs.
The trade tariffs kicked in on Tuesday, with US imposing 25% tariffs on imports from her northern and southern neighbours. Similarly Canada and Mexico started implementing counter-tariffs. Elsewhere, China’s Foreign Affairs Ministry weighed in following an additional 10% tariff by the US against Chinese imports. The ministry stated that China was ready for trade tariff or “any other type of war” against the US.
The rising tensions in the global marketplace are likely to drive more investors towards safe haven assets, favouring continued gains by gold prices. However, near-term gains by gold are likely to be limited after the latest Purchasing Managers Index (PMI) data beat forecast figures. However, the Non-Farm Payrolls (NFP) figures scheduled for Friday will have a greater impact on the XAUUSD pair.
The momentum on gold price favours the buyers to be in control if action stays above the pivot level at $2,916. Immediate resistance will likely be at $2,932. However, if the buyers extend their control, the price action could break above that level and test the second resistance at $2,945.
On the other hand, breaking below $2,916 will signal a shift by the momentum to the downside. With the sellers in control, gold price will likely find the first support at $2,903. The upside thesis will be invalid if the price breaks below that level. An extended control by the sellers could drive gold lower to test $2,890.
This post was last modified on Mar 05, 2025, 16:38 GMT 16:38