The Gold price (XAU/USD) trades in positive territory near $3,245 during the early Asian session on Monday. The renewed concerns over the US recession and US-China trade relations provide some support to safe-haven assets like Gold. The US ISM Services Purchasing Managers Index (PMI) for April will be in the spotlight later on Monday.
While the Chinese Commerce Ministry indicated Beijing was considering an offer from the US to hold talks over US President Donald Trump's 145% tariffs, the two sides still seem far apart. Trump avoided answering the question if there will be trade deals this week, saying there 'could' be. The uncertainty surrounding tariff boosts the safe-haven flows, benefiting the precious metal.
The rising bets that the Fed will cut its interest rate in June raise non-yielding bullion's appeal. "The labor report leaves little doubt that the FOMC will keep rates on hold this week, and the bar for cutting is now even higher for June," said Michael Feroli, head of U.S. economics at JPMorgan.
Nonfarm Payrolls (NFP) in the United States (US) rose by 177K in April, according to the US Bureau of Labor Statistics (BLS) on Friday. This figure followed the 185K increase (revised from 228K) seen in March and came in above the market consensus of 130K. Additionally, the Unemployment Rate remained unchanged at 4.2% in April, as expected, while the Average Hourly Earnings held steady at 3.8% YoY in the same reported period.
On the other hand, improved market sentiment and a risk-on trade could drag the yellow metal lower and lead to some profit-taking in Gold's safe-haven. Trump eased tensions with the US Fed, saying that he will not remove Jerome Powell as Fed Board Chairman before his term ends in May 2026. Nonetheless, Trump reiterated his belief that the Fed should cut interest rates at some point
Source; Fxstreet
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