Gold price (XAU/USD) trades with a mild positive bias above the $2,900 mark during the Asian session on Tuesday, though it lacks bullish conviction and remains confined in a familiar range that has held over the past week or so. Investors remain worried that US President Donald Trump's threat of reciprocal tariffs would trigger a global trade war. This turns out to be a key factor that continues to underpin demand for the safe-haven bullion.

Adding to this, expectations that the Federal Reserve (Fed) might cut interest rates further this year, bolstered by the unforeseen drop in US Retail Sales, offers support to the non-yielding Gold price. That said, a goodish bounce in the US Treasury bond yields and a modest US Dollar (USD) uptick hold back the XAU/USD bulls from placing fresh bets. Nevertheless, the uncertainty over Trump's trade policies should act as a tailwind for the commodity.
Gold attracts buyers for the second straight day amid concerns about a global trade war.
Bets that the Fed would cut rates further lend support to the non-yielding yellow metal.
A modest USD uptick might cap gains, though the bias remains tilted in favor of bulls.
Gold price continues to attract haven flows amid worries about Trump's trade policies
US President Donald Trump threatened on Friday, saying that levies on automobiles would be coming as soon as April 2. This comes on top of Trump's reciprocal tariff plans on countries that charge duties on US imports and continues to underpin the safe-haven Gold price.
The disappointing release of US Retail Sales figures on Friday, along with mixed signals on inflation, suggests that the Federal Reserve could possibly cut rates at the September or October policy meeting. Fed Funds Futures see the possibility of a 40 basis point rate cut in 2025.
Philadelphia Fed President Patrick Harker said on Monday that the labor market is largely in balance and the current economy argues for a steady policy as inflation has been sticky over recent months. Future Fed rate policy choices will be data-driven, Harker added further.
Fed Board of Governors member Michelle Bowman noted that high asset prices may have impeded progress on inflation and more certainty is needed on declining inflation before reducing rates. Bowman added that wage growth above level is consistent with the Fed inflation target.
Fed Board of Governors member Christopher Waller said that inflation progress last year has been excruciatingly slow and that rate cuts would be appropriate in 2025 if inflation repeats the 2024 pattern. Waller expects disinflation and interest rate cuts to resume year on year.
The US Dollar attracts some buyers and for now, seems to have snapped a three-day losing streak to its lowest level since December 17. This might hold back traders from placing aggressive bullish bets around the XAU/USD and keep a lid on any further appreciating mov
Traders look to the release of the Empire State Manufacturing Index from the US for some impetus later during the North American session. Apart from this, speeches by influential FOMC members would drive the USD demand and produce short-term trading opportunities.

Source: Fxstreet