XAU/USD Steady In Negative Territory, US NFP Data In Focus
Gold (XAU/USD) prices moved lower to a two-week low near $3,235 during the early Asian session on Friday (2/1). Easing trade tensions between the US and its trading partners have affected the demand for safe-haven assets, weighing on the precious metal.
US President Donald Trump announced a potential trade deal with India, South Korea, and Japan, seeking to turn his tariff policies into a trade agreement. Further, Chinese state media reported late on Thursday that the US has contacted China to start trade talks over Trump’s 145% tariffs.
The US dollar (USD) strengthened on these positive developments, making gold less attractive to buyers of other currencies. “Markets see trade tensions easing and are less concerned about the Fed’s independence, reducing the demand for safe-haven assets for now,” said UBS analyst Giovanni Staunovo.
Following the weaker-than-expected US Q1 Gross Domestic Product (GDP) released on Wednesday, markets are now pricing in higher chances of a Federal Reserve (Fed) rate cut, though everything is contingent on a trade deal. This, in turn, could boost the non-yielding Gold prices.
The April US jobs report will be in focus on Friday as it could prompt the US Fed to start cutting interest rates sooner rather than later. A weaker reading could weigh on the USD and limit the downside for the USD-denominated commodity.
Source: FXStreet