Gold prices were steady on Monday, trading in a very tight range. Earlier, US bond yields retreated from their lowest levels this year, following US President Donald Trump’s comments on the US economy. Traders are also looking ahead to the upcoming Federal Reserve meeting scheduled for March 19.
Gold (XAU/USD) was remarkably stable at the start of week, holding near the $2,900 level. Traders have been reviewing President Trump’s comments in an interview with Fox News over the weekend. When asked about the state of the US economy, President Trump said the economy was in a “transitional” phase, while markets were already beginning to consider the possibility of a recession.
In the same vein, Federal Reserve Chairman Jerome Powell made remarks on Friday, coinciding with the start of the bank’s blackout period. These comments came ahead of interest rate decision on March 19, when interest rate is expected to remain unchanged. In his remarks, Powell stressed that the central bank does not need to take immediate action, noting that keeping interest rates steady is not too costly, especially when compared to the risks of making proactive decisions on interest rates.
Daily Market Movers and the Fed
In the context of economic developments, President Trump stated that the economy is going through a period of “transition,” amid the continued focus on the issues of tariffs and federal job cuts, as reported by Bloomberg. For his part, Federal Reserve Chairman Jerome Powell acknowledged the increasing uncertainty in the United States. However, he stressed that the central bank is in no rush to adjust its monetary policy. Recent data, such as the Atlanta Fed’s GDP measure, have shown that the U.S. economy may contract this quarter. On the other hand, low borrowing costs are prompting investors to head to gold, according to Reuters.
Technical Analysis: It’s Time to Get Off the Boil
The high probability of 97% indicates that interest rates will remain steady at the next monetary policy meeting of the Federal Reserve on March 19. Meanwhile, the odds of a rate cut by the June 18 meeting have risen to 81.8%, as reported on Monday.
In this context, experts believe that markets may witness a pullback after periods of tension and volatile movements on the charts. This is especially true for precious metals such as gold, as the yellow metal is expected to benefit from any price decline. If President Trump maintains a relatively calm stance on tariffs, tensions in the markets may ease, leading to gold prices falling towards key support levels, such as the $2,878 level.
While gold is trading near $2,905, the daily pivot point at $2,912 and daily resistance at $2,927 are the most important levels to watch. If gold sees further flows, prices may reach the daily R2 resistance at $2,945, or even the high of $2,956 recorded on February 24.
Gold prices steady amid tariff concerns; Investors weigh Fed rate outlook
Gold prices were steady in Asian trade on Monday, after posting modest gains last week. The dollar continued to weaken, remaining near a four-month low, amid uncertainty over U.S. trade policy.
Investors also parsed last week’s jobs report, as well as comments from the Federal Reserve chairman, to gauge future interest rate outlook. Spot gold was steady at $2,911.21 an ounce, while April gold futures were up 0.1% at $2,918.27 an ounce by 02:05 ET (06:05 GMT).
Trump refrains from recession predictions amid tariff fears
President Trump has refused to predict whether the United States will face a recession in 2025 amid escalating trade tensions. The Trump administration recently imposed 25% tariffs on imports from Mexico and Canada, with additional measures targeting China. These policies have raised concerns about a potential slowdown in the US economy and rising inflation rates.
The tariffs, especially those imposed on steel and aluminum imports from Canada and Mexico, have increased tensions in the markets. This has led to price volatility, which has led investors to increasingly turn to safe-haven assets such as gold. The precious metal has recently risen to record highs.
Stability of the dollar index and gold enhance its attractiveness
Gold prices continued to benefit from the decline in the US dollar index, which reached a four-month low. The decline of the dollar against major currencies is a catalyst for increasing the attractiveness of gold, as it makes it easier for investors to buy the yellow metal in global markets.
On the other hand, other precious metals have recorded somewhat weak performance. Platinum futures were steady at $966.25 an ounce, while silver futures rose 0.3% to $32.943 an ounce.
Investors await jobs data, Powell’s comments on Fed rates
Economic data released on Friday presented a mixed picture, with the U.S. economy adding 151,000 jobs in February, slightly below expectations. The unemployment rate also rose to 4.1%. The weaker-than-expected data boosted expectations for a rate cut in 2025.
However, Federal Reserve Chairman Jerome Powell indicated that the central bank will remain patient on interest rates. He acknowledged that the U.S. economy remains in a good place despite high uncertainty. He said the Fed is carefully monitoring recent policy changes by Trump, including tariffs and federal layoffs.
Copper falls on weak Chinese data; weak dollar limits losses
Copper prices fell slightly, weighed down by the cautious mood prevailing in markets. Economic data from China on Sunday showed deflationary pressures deepened in February, with consumer and producer prices falling more than expected amid weaker consumer spending. This adds to concerns about a slowdown in China’s manufacturing activity, making copper less attractive to investors.
Despite the decline, copper’s losses were limited by a weaker US dollar against major currencies. Copper futures on the London Metal Exchange fell 0.1% to $9,571.05 a tonne, while copper futures expiring in April fell 0.3% to $4.6945 a pound.
