Gold trading cautiously ahead of U.S. economic data

7 Mart 2025

Written by Linh Tran, Market Analyst at XS.com

Gold continued to trade sideways yesterday, as market sentiment remained cautious on geopolitical developments and trade tensions.

Geopolitical risks, trade wars, and a weak economy have been strong drivers of gold’s recent upward trend. However, these factors now seem to be experiencing delays and uncertainty.

Geopolitical risks remain prolonged following last week’s clash between U.S. President Donald Trump and Ukrainian President Volodymyr Zelensky. Both sides have since taken further actions, with the U.S. temporarily halting aid to Ukraine and Ukraine responding that they will continue their efforts despite lacking U.S. support. However, the U.S. emphasized that this is a “temporary pause,” while the Ukrainian president has continued to express a desire to reach an agreement with the U.S.

Senior U.S. and Ukrainian officials are expected to meet in Saudi Arabia next Wednesday to discuss efforts to reach a ceasefire in the war with Russia. Meanwhile, yesterday, Ukrainian President Zelensky stated in Brussels that Ukraine and the U.S. “have resumed work together” and expressed hope that “a meaningful meeting will take place next week.”

Geopolitical uncertainty is expected to persist at least until next Wednesday, causing investors to delay their actions regarding safe-haven assets.

On the other hand, U.S. President Donald Trump has decided to temporarily delay the imposition of a 25% tariff on imported goods from Mexico and Canada for one month, extending the deadline to April 2, 2025. During this pause, the parties are expected to continue negotiations to seek a long-term solution to trade and security-related issues. Once again, the market is in a wait-and-see mode before making any significant moves.

The health of the economy is the final major factor among the three mentioned and the key aspect investors are anticipating today. The release of U.S. Non-Farm Payrolls and the Unemployment Rate data will be a critical highlight, providing insight into potential investor actions. The published figures could influence the Federal Reserve’s monetary policy decisions, ultimately impacting gold prices.

 

Zaid Barem / ymm