Gold prices edge lower on Tuesday amid expectations that the Federal Reserve could maintain higher interest rates for an extended period.
A stronger US Dollar (USD) contributes to diverting flows away from the XAU/USD pair. However, concerns over tariffs and fears of a global trade war may provide support to the safe-haven metal.
Gold (XAU/USD) fails to build on the previous day’s upward momentum near the $2,900 mark, attracting selling pressure during the Asian session. The anticipation that US President Donald Trump’s trade tariffs could fuel inflation and prompt the Fed to keep rates elevated weighs on the non-yielding yellow metal. Additionally, renewed USD strength adds further pressure on gold.
Meanwhile, concerns about the economic impact of Trump’s protectionist policies, which could spark a global trade war, dampen risk appetite. A weaker tone in equity markets reflects this sentiment, potentially supporting gold prices. Furthermore, geopolitical uncertainties may help limit further downside for bullion. Investors may also adopt a cautious stance ahead of the US Nonfarm Payrolls (NFP) report due on Friday.
Daily Market Movers Digest: Gold struggles to attract buyers despite supportive factors.
