Gold price steadies as markets weigh tariff uncertainty, Fed outlook
Gold price remains firm on Wednesday amid speculation that the President of the United States (US), Donald Trump, could roll back some tariffs, at least duties on automobiles linked to the USMCA free trade agreement. Nevertheless, uncertainty remains, and XAU/USD trades at $2,919, virtually unchanged.
Bullion prices had been seesawing around the $2,910 mark during the North American session as the news flow continued. The Federal Reserve (Fed) revealed the Beige Book in anticipation of the upcoming monetary policy, stating that overall economic activity rose, yet prices are higher amid Trump trade policies.
Data-wise, ADP revealed that private hiring in February slowed sharply compared to January’s figures. Meanwhile, according to February's latest ISM Services PMI, businesses continued to expand healthily. Despite this, fears that inflation could reaccelerate remained, as Prices Paid, a sub-component of the PMI, jumped above the 60 level, hinting that producers are paying higher prices, which could stoke a second round of inflation.
Meanwhile, recently revealed US data sparked recessionary fears. The Atlanta Fed GDPNow Model projects the Gross Domestic Product (GDP) for Q1 2025 at -2.8%, down from 1.6% estimated on Monday.
Regarding geopolitics, an aide of Ukraine President Zelensky discussed steps to achieve peace with the US National Security Advisor as Ukraine and the US agreed on a meeting soon.
This could push Gold prices lower, alongside higher US Treasury bond yields. Traders will be eyeing Friday's release of February’s Nonfarm Payrolls figures, with analysts projecting 160K jobs added to the workforce.
