Gold slips as Trump-Xi call eases trade tensions, markets await US NFP
Gold price pared its earlier gains after breaking news revealed that the call between US President Donald Trump and his Chinese counterpart, Xi Jinping, was positive, with the two primarily discussing trade, according to Trump. At the time of writing, XAU/USD trades at $3,350, down 0.72%.
In his social network, Trump revealed that the call was positive, adding, “There should no longer be any questions respecting the complexity of Rare Earth products.”
He said that US and Chinese teams would be meeting in a location to be determined. The news sent Bullion prices downward, as risk appetite improved even though US economic data disappointed investors and increased the chances for a Federal Reserve (Fed) rate cut this year.
The US Bureau of Labor Statistics revealed that, indeed, the labor market is weakening as the number of Americans filing for unemployment benefits rose. Other data showed the trade deficit narrowed in April, according to the US Bureau of Economic Analysis, as the front-load of goods ahead of tariffs ebbed.
The Greenback trimmed some of its earlier losses, as revealed by the US Dollar Index (DXY). The DXY, which tracks the buck’s value against six peers, is virtually unchanged at 98.75.
Gold’s faith will lie in Friday’s Nonfarm Payrolls (NFP) figures. If the data show that the labor market remains solid, the yellow metal could edge lower as the US Dollar rises. Otherwise, expect further upside in XAU/USD as investors would grow confident that the Fed could cut rates earlier than expected.
Source: FXstreet
