Gold prices pull back after reaching a historic peak above $3,000, as uncertainty over U.S. President Donald Trump’s trade policies weighs on investor sentiment. The precious metal surged to an all-time high of $3,004 per troy ounce before retreating to $2,982, marking a 0.21% decline for the day. A weakening U.S. dollar also contributed to gold’s initial rally before the subsequent pullback.
Geopolitical developments are further influencing gold demand. The Ukraine-Russia ceasefire remains uncertain, with Russia appearing hesitant to fully comply with the agreed 30-day truce.
Meanwhile, the People’s Bank of China (PBoC) has expanded its gold reserves for the fourth consecutive month in February, according to data from the World Gold Council (WGC).
Concerns over a potential U.S. economic recession have also fueled demand for gold as a safe-haven asset, exacerbating pressure on the dollar. This shift in sentiment has led to increased expectations that the Federal Reserve (Fed) will implement policy easing, with projected rate cuts totaling 66 basis points (bps) in 2025, down from a previous estimate of 74 bps just a day earlier.
Traders are closely watching next week’s Federal Reserve (Fed) policy decision, as market sentiment remains driven by economic uncertainty. Last Friday, Fed Chair Jerome Powell highlighted that “market measures of inflation expectations have moved up, driven by tariffs,” indicating concerns that trade policies could exacerbate inflationary pressures.
On the data front, the University of Michigan (UoM) Consumer Sentiment Index posted a disappointing reading, while inflation expectations climbed higher, largely attributed to tariffs imposed by U.S. President Donald Trump.
Looking ahead, next week’s U.S. economic calendar includes key reports such as Retail Sales, housing market data, the Fed’s monetary policy decision, and updated economic projections, all of which could influence market direction.
Market Movers Daily Digest: Gold prices hold steady amid weaker US Dollar
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The U.S. 10-year Treasury bond yield has rebounded, rising five basis points to 4.320%. Meanwhile, U.S. real yields—measured by the 10-year Treasury Inflation-Protected Securities (TIPS) yield, which typically moves inversely to gold prices—climbed 4.5 basis points to 2.013%, according to Reuters.
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The U.S. Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, slipped 0.14% to 103.71.
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Economic data from the University of Michigan (UoM) Consumer Sentiment survey for March showed a steep drop, with sentiment plunging to 57.9 from 64.7, significantly below the expected 63.1.
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Inflation expectations also surged, with Americans now anticipating 12-month inflation to rise from 4.3% to 4.9%. Over the next five years, consumers expect inflation to reach 3.9%, up from the previous projection of 3.5%.
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Despite recent lower-than-expected inflation figures, economists warn that tariffs on U.S. imports could fuel a renewed inflationary surge in the coming months.
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On Wednesday, 25% tariffs on steel and aluminum went into effect at midnight as President Donald Trump pushes forward with trade measures aimed at reducing the U.S. trade deficit.
XAU/USD technical outlook: Gold faces challenges in sustaining levels above $3,000
Gold pulls back after reaching the key $3,000 milestone, with the retreat viewed as a temporary pause before bulls attempt another push to secure a daily close above the record high of $3,004. Key resistance levels ahead are $3,050 and $3,100.
On the downside, initial support is seen at $2,950, and a break below this level could open the door for a test of $2,900, followed by $2,850. Further support is found at the February 28 low of $2,832.