Gold prices remain stable as a weaker dollar supports the market.

On Tuesday (April 29),Wenhua Futures app official website download during the Asian market's early trading session, the spot price of gold fluctuated within a narrow range, currently trading at $3,337.58 per ounce. Gold prices reversed Monday's downturn, initially dipping to around $3,268, but later bouncing back due to bargain buying, ultimately closing at $3,343.91 per ounce. A general decline in the dollar supported gold prices as investors cautiously awaited further news on U.S. trade policies and prepared for a week of intensive economic data that may initially reveal the impact of Trump's trade war on the economy.

Juan Perez, a director at Monex USA, stated: "On Monday, the drop in the dollar and concerns about the stock market interacted. Although corporate earnings will keep the market active, the fundamental issue remains a lack of confidence in the positive direction of the U.S. economy, especially as Trump attempts to take unilateral actions."

The U.S. Dollar Index fell 0.7% on Monday, closing at 98.91, the lowest in four trading days, making gold the preferred safe-haven asset. As of April, the Dollar Index has dropped by 4.89%, putting the dollar on track for its most significant monthly decline since last July.

A Reuters survey indicated that most economists believe the risk of a global economic recession this year is high, with many contending that Trump's tariff policies have already weakened business confidence. This situation further fueled the demand for gold as a safe-haven asset, as investors sought risk-hedging assets.

Gold's rise is also supported by other factors. On Monday, Bassant noted that the U.S.'s primary trading partners had made "very good" proposals to avoid further tariffs, with one of the first agreements likely to be with India. These uncertainties have heightened investors' demand for gold, especially in the context of slowing economic growth and dollar instability.

Additionally, investors are awaiting the U.S. April employment report, with expected job growth, although the pace is expected to noticeably slow compared to the previous month. Federal Reserve officials have stated they are ready to cut rates if economic growth risks become more apparent. However, most officials seem more inclined to observe the impact of Trump's tariff policies on the real economy indicators, such as inflation and employment, before making decisions.

This week, the U.S. will release first-quarter GDP data and the core PCE inflation indicator, while Europe will publish relevant GDP and preliminary inflation data. These data could influence the dollar's movement, thereby indirectly affecting gold prices.

Monex's Perez added: "Later data might impact the dollar's trajectory, but currently, the market's focus remains on the headlines about trade progress." TD Securities commodity strategist Daniel Ghali also noted that although there might be some short-term gold selling, the downside risk for gold is limited, and the rise in gold prices reflects continued investor demand for gold.

Today, the U.S. will release March JOLTs job openings data, and the U.S. and Japan will conduct the second round of tariff negotiations. Investors need to pay attention to these developments and their potential impact on the market.

Risk Warning and Disclaimer

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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