Gold price climbs amid a soft US Dollar (USD) as the trade war between the United States (US), Canada, Mexico and China escalates with new tariffs taking effect on Tuesday. Therefore, the plunge of the USD underpins the precious metal. The XAU/USD is trading at $2,918, gaining 0.62%.

Market sentiment remains downbeat after 25% tariffs on Canada and Mexico and an additional 10% duties in China took effect around midnight. Consequently, traders seeking safety pushed Bullion prices higher on increased demand, while the Greenback dropped across the board.
Meanwhile, recently revealed US data sparked recessionary fears. The Atlanta Fed GDP Now Model projects the Gross Domestic Product (GDP) for Q1 2025 at -2.8%, down from 1.6% estimated on Monday.

On Monday, the February ISM and S&P Global Manufacturing PMI readings were mixed. The former slowed towards the expansion/contraction 50 thresholds, while the latter expanded solidly. US Treasury bond yields slumped on the data as traders began to price in the Federal Reserve's (Fed) interest rate cuts.

Therefore, traders seeking safety bought Bullion pushing prices on the way towards $2,900.

Gold traders' focus shifts toward the release of the ISM Services PMI, Initial Jobless Claims data and February's Nonfarm Payrolls.
Daily digest market movers: Gold price surges amid pessimistic US economic outlook
The US 10-year Treasury note climbs six basis points (bps) to 4.221%.
US real yields, as measured by the US 10-year Treasury Inflation-Protected Securities (TIPS) yield, are rising six bps up to 1.858%.
St. Louis Fed President Alberto Musalem said the economic outlook is for continued solid economic growth, but recent data pose some downside risks.
Data from Prime Market Terminal revealed that money markets had priced in the Federal Reserve (Fed) easing policy by 74 basis points (bps), up from 70 bps last week.

Source: Fxstreet