Gold snaps below $2,900 with concerns on US economy swelling

LONDON (March 10) Gold’s price (XAU/USD) is ticking below the $2,900 level at the start of the week with some selling pressure on Monday as market rout picks up towards the US trading session. Traders are mulling over comments from United States (US) President Donald Trump after an interview on Fox News over the weekend. When asked about the US economy, President Trump said that the economy is in a ‘transition’ phase, while markets have already floated the idea that the US economy is in a recession scenario. 

Meanwhile, Federal Reserve (Fed) Chairman Jerome Powell issued some remarks on Friday before the Fed’s blackout period started. That blackout period precedes the actual policy rate decision on March 19, where expectations are for keeping the policy rate steady. Powell said that the central bank does not need to do anything at this point and that the price for keeping its policy rate steady comes with a very small price against the chances of a policy mistake by changing interest rates preemptively. 

Daily digest market movers: Fed to hold

• US President Donald Trump said the economy faced “a period of transition” as he pressed on with his focus on tariffs and federal job cuts, Bloomberg reports. 
• Fed Chair Jerome Powell acknowledged on Friday the rising economic uncertainties in the US but said the central bank does not need to rush to adjust policy. Among recent data points, the Atlanta Fed’s Gross Domestic Product (GDP) gauge signaled the US economy may shrink this quarter. Lower borrowing costs tend to be beneficial for Gold, Reuters reports. 
• The CME Fedwatch Tool sees a 97.0% chance for no rate changes in the upcoming Fed policy meeting on March 19. The odds for an interest rate cut by the June 18 meeting have grown now to 81.8% on Monday. 

FXStreet