Gold prices rebounded on Tuesday, driven by a weaker U.S. dollar and increased safe-haven demand.
The shift in sentiment came amid growing concerns about a potential economic slowdown in the U.S., especially after President Donald Trump stated that the economy was going through a “transitional period”.
Trump didnโt rule out that his policies could cause a recession, affecting market sentiment.
At the same time, recent data showed a potential slowdown in the labor market, boosting demand for safe-haven assets. Additionally, the market is awaiting inflation data including the CPI and PPI. Softer-than-expected figures could push the Fed to adopt a more dovish tone and consider cutting interest rates sooner, which could support gold.
Traders will also focus on peace talks as Ukrainian and U.S. officials meet, in particular with tensions increasing between Ukraine and Russia. Any positive news could weigh on gold, while any setbacks or uncertainty could push gold prices higher. In the meantime, gold could also continue to find support in gold ETF inflows although inflows last week were weaker than during the previous few weeks.
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