On Tuesday, the AUD/USD currency pair edged higher, driven by a combination of economic and geopolitical factors. Concerns over a tariff-induced slowdown in U.S. growth have kept the U.S. dollar (USD) near a multi-month low. Alongside this, expectations that the Federal Reserve will cut interest rates multiple times this year have further depressed the USD. Meanwhile, the Australian dollar faces headwinds from growing tensions in the U.S.-China trade war and a prevailing risk-off mood in global markets.
Amid these economic concerns, gold prices have traded with a negative bias around the $2,885 region. However, the downside for gold appears limited due to trade war fears and the overall risk-off environment, which could act as a tailwind for the yellow metal. Bets on additional interest rate cuts by the Federal Reserve and the ongoing USD selling bias might also support gold prices moving forward.
In economic data, consumer price inflation started strong in 2025 but seems to have cooled in February. This moderation is likely a result of some giveback in categories that saw significant price increases in January. At the same time, the USD/JPY currency pair struggles near a five-month low as revised figures for Japan's fourth-quarter GDP show economic growth slowing to 2.2% on an annualized basis.
While these developments unfold, it's important to note that neither the author nor FXStreet hold registration as investment advisors. This article is not intended to serve as investment advice but rather aims to provide an objective summary of current market conditions and economic indicators.