After US President Trump backtracked significantly on both tariffs against China and the dismissal of Fed Chair Powell, the price of Gold temporarily fell back below $3,300 per troy ounce, Commerzbank's FX analyst Thu Lan Nguyen notes.

Gold is likely to remain in demand as a safe haven

"However, as it remains unclear when and in what form an agreement with the Chinese leadership is possible - there have been different statements on this from Trump, US Treasury Secretary Scott Bessent and Beijing - Gold is likely to remain in demand as a safe haven for the time being. In addition, both Fed Governor Christopher Waller and Cleveland Fed President Beth Hammack have fuelled hopes of interest rate cuts with their latest statements."

"Waller would expect more and faster interest rate cuts if the situation on the labour market deteriorates significantly due to the tariffs. Hammack, meanwhile, could imagine a first interest rate cut as early as June, depending on the data. Although the market-based US interest rate expectations did not move sustainably as a result - a first move is still expected by the majority in the summer - many market participants are now likely to feel strengthened in their expectations, which is also a support for the Gold price."

"In addition to the statements from the White House, attention will now be focussed on the economic data from the US. If these already show clear signs of a slowdown in US tariff policy, the price of Gold could quickly rise again."