Gold Price Holds Near $3,250 as Trade Tensions and Fed Rate Cut Hopes Boost Safe-Haven Demand

Gold price forecast: XAU/USD edges higher in the early Asian session on Monday, trading around $3,245 as investors seek safety amid lingering uncertainty over US-China trade talks and economic slowdown fears. The yellow metal continues to benefit from renewed safe-haven demand, with market attention now turning to upcoming US economic data, including the ISM Services PMI report due later today.

US-China Trade Uncertainty Fuels Gold Upside

Gold prices remain supported as tensions between the United States and China persist over tariff negotiations. Beijing recently indicated it is reviewing a potential US proposal to ease President Trump’s 145% import tariffs, though concrete progress remains elusive. Trump’s ambiguous comments about the possibility of a trade deal this week have further stoked market anxiety, enhancing gold’s appeal as a defensive asset.

US Jobs Report Beats Expectations, But Recession Risks Linger

Last week’s Nonfarm Payrolls (NFP) report surprised to the upside, showing a 177K increase in April, above the expected 130K. However, concerns remain about a broader economic slowdown. The Unemployment Rate held steady at 4.2%, while Average Hourly Earnings also remained unchanged at 3.8% YoY, suggesting wage growth isn’t accelerating fast enough to pressure inflation.

Despite the stronger-than-expected jobs data, many analysts believe the Federal Reserve may still consider a rate cut in June due to broader economic headwinds. “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, Chief US Economist at JPMorgan.

Technical Outlook: Gold Price Eyes $3,250 Resistance

From a technical perspective, XAU/USD remains in a short-term bullish trend, trading above key support at $3,200. The next resistance lies near $3,250, followed by the recent high around $3,300. A sustained move above $3,250 could trigger further buying, while downside pressure remains limited as long as the price holds above the ascending channel support near $3,180.