Gold (XAU/USD) is maintaining its upward momentum, trading around $2,915 during the early Asian session on Monday. The precious metal is being supported by a mix of global uncertainties, including US President Donald Trump’s trade policies and a slowdown in the US labor market.
Factors Supporting Gold Prices
Global Trade Uncertainty
President Trump’s recent moves in the trade arena are contributing to market uncertainty. On Thursday, he issued an executive order that temporarily exempted goods from Canada and Mexico under the USMCA agreement, just two days after imposing tariffs. However, US Commerce Secretary Howard Lutnick clarified on Sunday that the 25% tariffs on steel and aluminum imports, set to take effect on Wednesday, are unlikely to be postponed. This ongoing uncertainty regarding Trump’s tariff policies is likely to drive safe-haven demand, benefiting gold in the short term.
Weaker US Labor Market Data
The US labor market showed signs of slowing down in February. The latest data from the US Bureau of Labor Statistics (BLS) revealed that Nonfarm Payrolls (NFP) grew by just 151,000 in February, missing market expectations of 160,000, and coming in below the previous month’s revised figure of 143,000.
This weaker-than-expected data suggests that the Federal Reserve may continue to cut interest rates, which tends to weaken the US Dollar (USD) and, in turn, supports the price of USD-denominated commodities like gold. The Unemployment Rate increased to 4.1% from 4.0% in January, and the annual wage inflation, measured by Average Hourly Earnings, rose slightly to 4.0% from 3.9% in January.
Gold Price Outlook
Given the current mix of global trade uncertainties, the ongoing slowdown in the US labor market, and the Federal Reserve’s potential interest rate cuts, gold is likely to maintain its safe-haven appeal in the near term. The weaker US job data adds further pressure to the USD, pushing investors towards gold as a hedge against uncertainty and inflation.
If these factors persist, XAU/USD could remain well-supported above the $2,900 level, with potential upside if global uncertainties continue to mount.
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