Gold price (XAU/USD) maintains its bid tone around the $2,900 round-figure mark through the first half of the European session on Monday, though it lacks follow-through and remains below the all-time peak touched last week. Investors remain worried that US President Donald Trump's tariffs could trigger a global trade war. This turns out to be a key factor that continues to benefit the safe-haven bullion.
Meanwhile, the growing market acceptance that the Federal Reserve (Fed) would stick to its hawkish stance and keep interest rates on hold for an extended period helps revive the US Dollar (USD) demand. Moreover, the optimism over talks between the US and Russia aimed at ending the war in Ukraine, along with a positive risk tone, keeps a lid on any further appreciating move for the Gold price.
Gold regained positive traction on Monday amid sustained USD weakness.
Concerns about Trump's tariffs further benefit the safe-haven XAU/USD pair.
The fundamental and technical setup underpin prospects for additional gains.
Gold price bulls turn cautious amid the emergence of some USD dip-buying, positive risk tone
The US Dollar languishes near its lowest level since December 17 touched in reaction to disappointing US Retail Sales data on Friday and helps revive demand for the Gold price.
The US Census Bureau reported that Retail Sales declined by 0.9% in January, worse than the decrease of 0.1% expected and the 0.7% increase (revised from 0.4%) in December.
The markets were quick to react and are now pricing in a rate cut by the Federal Reserve in September, rather than at the end of the year, further benefiting the precious metal.
Kevin Hassett, Director of the US National Economic Council (NEC) said that a 40 basis points drop in 10-year US Treasury yield could be a sign the market expects lower inflation.
US President Donald Trump ordered officials to formulate plans for reciprocal tariffs on countries that impose taxes on US imports, though he stopped short of announcing levies.
Adding to this, Trump threatened that levies on automobiles would be coming as soon as April 2, fueling concerns about a global trade war and underpinning the XAU/USD.
With US and Russian officials expected to hold talks in Saudi Arabia, Russian troops step up their attacks in eastern Ukraine, further boosting demand for the safe-haven commodity.

Source: Fxstreet