Gold prices (XAU/USD) surged more than 2%, gaining over $70 on Monday as the US dollar weakened, despite positive economic data indicating a resilient U.S. economy. Gold is currently trading at $3,321 after bouncing back from daily lows of $3,237.
The market sentiment was bolstered by a report from the Institute for Supply Management (ISM), which showed that service sector providers remain confident in the strength of the U.S. economy. The data also indicated rising prices, partly driven by U.S. President Donald Trump’s tariffs.
Over the weekend, Trump announced a 100% tariff on foreign-produced movies and urged the Federal Reserve to lower interest rates. He also confirmed that he would not remove Fed Chair Jerome Powell before his term ends in May 2026.
Trump emphasized that the U.S. is engaged in discussions with several countries, including China, with his main priority being to secure a trade deal with Beijing.
As traders prepare for the Federal Reserve’s upcoming monetary policy meeting on Wednesday, markets have fully priced in the expectation that the central bank will hold interest rates steady. However, all eyes are on Fed Chair Jerome Powell’s press conference, as policymakers are not expected to update their forecasts until June, which could offer valuable insights into future monetary policy direction.
