Gold Price: XAU/USD holds positive ground above $2,900 amid renewed US tariff threats

LONDON (February 26) Gold price (XAU/USD) trades with mild gains around $2,920 during the early Asian session on Thursday. Trade tensions and economic uncertainty continue to drive demand for safe-haven assets like Gold. 

Late Wednesday, US President Donald Trump reiterated his insistence on 25% tariffs on Canada and Mexico, as well as adding the European Union (EU) to the mixed list of countries from which he will penalize US consumers for importing. Trump added that tariffs on Canada and Mexico will go into effect on April 2.

Market players will closely watch the developments surrounding further Trump’s tariff policies. The tariff uncertainty could boost the safe-haven flows, benefiting the precious metal. 

On the other hand, Trump’s plans for higher tariffs have raised inflation worries at the US Federal Reserve (Fed), which might convince the US central bank to keep interest rates higher for longer. This, in turn, might cap the upside for the precious metal as higher interest rates tarnish non-yielding gold's appeal.

Additionally, analysts suggest that the pullback is part of a normal profit-taking cycle, with long-term bullish remains in place. “We continue to see an overall upward trend,” said David Meger, director of metals trading at High Ridge Futures. “This appears to be routine profit-booking rather than a shift in sentiment,” Meger added. 

FXStreet