Gold Price Rose As Trade War Tensions Remained Elevated -

Gold Price Rose As Trade War Tensions Remained Elevated

Feb 08, 2025Jeremy ParkinsonFinance, No picture0

Image Source: Unsplash

Gold gained as traders reacted to President Trump’s threat of new reciprocal tariffs, which further enhanced its safe-haven status.

US Nonfarm Payrolls fell short of expectations, yet a declining Unemployment Rate seemed to suggest a resilient labor market.

PBoC’s increased gold reserves and cautious comments from Fed officials contributed to the yellow metal’s price dynamics.

Gold resumed its uptrend on Friday amid the escalation of the trade war between the US and China, as well as a mixed US employment report. The XAU/USD currency cross was seen trading at around $2,862, up 0.24%.US President Donald Trump’s plans to announce reciprocal tariffs on many countries next week lent a lifeline to bullion traders as the yellow metal rose on those remarks. Therefore, further tensions over the weekend could increase flows to gold and its safe-haven appeal.US data revealed that Nonfarm Payrolls in January missed the mark, but the Unemployment Rate dipped compared to estimates and December’s reading. The data suggests the labor market remains strong, which might prevent the Federal Reserve from easing policy. Following the data, bullion prices jumped to the session’s highs of $2,886. However, once the dust settled, gold retraced to its previous level.Reports emerged earlier that the People’s Bank of China (PBoC) resumed buying gold, with reserves increasing from 73.29 million ounces to 73.65 million ounces.Meanwhile, Fed speakers crossed the newswires, as they continued with their patient rhetoric. Minneapolis Fed President Kashkari saw the policy rate “modestly lower.” Chicago Fed President Goolsbee said recently that NFP data was solid and that rates would be lower, but the pace “will be slower with more fogginess.”Fed Governor Adriana Kugler said the inflation rate “has gone sideways,” adding that “it makes sense to hold the policy rate where it is.”

Market Movers: Gold Price Climbed Alongside the US Dollar

The US Dollar Index (DXY) edged up by 0.32%, as it rested at the 108.04 mark after hitting a daily low of 107.51.

The US 10-year Treasury bond yield rose five basis points to 4.487%.

US real yields, which often correlate inversely to bullion prices, climbed three basis points to 2.062%, which was a headwind for the XAU/USD cross.

US Nonfarm Payrolls in January dipped from 256,000 to 143,000, missing the mark of 170,000. The Unemployment Rate slid from 4.1% to 4%.

Money market Fed Funds rate futures priced in around 39 basis points of easing by the Federal Reserve in 2025.

XAU/USD Technical Outlook: Gold Prices Could Challenge $2,900
The trend in gold has been up, yet bulls failed to clear the $2,900 figure. The Relative Strength Index (RSI) appeared to be in overbought territory, while XAU/USD’s price action showed signs of exhaustion.If gold dropped below the $2,800 level, the next support would be the psychologically significant $2,750 area, followed by the Jan. 27 swing low of $2,730. Conversely, if the yellow metal could rise above the $2,900 mark, the next key resistance would be the psychologically important $2,950 level, followed by the $3,000 figure. More By This Author:GBP/USD Holds To Earlier Gains Near 1.2450 Post US Jobs Data GBP/USD Plummets As BoE Cut Rates Unanimously Gold Price Rallies On Traders Seeking Safety