Gold (XAU/USD) prices attracted some intraday sellers following an Asian session rally to a fresh all-time high as positive risk sentiment was seen denting demand for traditional safe-haven assets. Further, a modest US Dollar (USD) uptick from near multi-year lows turned out to be another factor that undermined the commodity. However, a meaningful corrective slide for the precious metal seems elusive amid ongoing uncertainty surrounding US President Donald Trump's tariff announcement, escalating US-China trade war, and fears of a global recession.

Meanwhile, the market is still pricing in the possibility that the Federal Reserve (Fed) will resume its rate-cutting cycle in June and lower borrowing costs at least three times this year. This might hold USD investors from placing aggressive bets and help limit the downside for the non-yielding Gold. Hence, it would be prudent to wait for a strong follow-through selling before confirming that the bullion has topped out in the near term. Traders now look forward to the second-tier US macro data and Fedspeak for near-term opportunities due later on Thursday.

Market Movers Daily Digest: Gold price rally pauses amid waning safe-haven demand

The US Census Bureau reported on Wednesday that Retail Sales rose 1.4% in March, the highest increase in more than two years. The reading followed a revised 0.2% increase in the previous month and beat market expectations for a 1.3% increase.

Adding Federal Reserve Chairman Jerome Powell said the US central bank is not likely to cut interest rates anytime soon, citing potential inflationary pressures stemming from US President Donald Trump's aggressive tariff policies. Meanwhile, equity markets in Asia-Pacific were mostly higher on Thursday, which, along with some US Dollar (USD) buying, kept traders from placing fresh bullish bets and capped gains in Gold prices.

US President Donald Trump started a fierce trade war with China earlier this month, raising tariffs to an unprecedented 145%. China retaliated with 125% duties on US goods and imposed new export licensing restrictions on seven rare earth metals.

The US government also imposed new licensing requirements and restricted exports of H20 artificial intelligence chips to China. Meanwhile, China's Foreign Ministry said that Beijing would not care if the US continues to play the tariff game.

Investors remain concerned that the two world powers' retaliatory tariffs on each other will hamper global economic growth. This capped market optimism and continued to support the safe-haven commodity.

Moreover, traders still expect the US central bank to continue its rate-cutting cycle in June. This held USD investors from placing aggressive bets and further acted as a tailwind for the non-yielding yellow metal.

Traders now look forward to the US economic docket – featuring the usual release of Weekly Initial Jobless Claims, Philly Fed Manufacturing Index and housing market data – and the Fed statement for near-term opportunities. (Newsmaker23)

Source: FXstreet