At the beginning of the Asian market on Tuesday (May 6th), spot gold fluctuated narrowly at a high in the past week, currently trading around $3330 per ounce. Driven by the weakening of the US dollar and safe haven demand, gold prices rose nearly 3% on Monday, with spot gold closing at $3333.73 per ounce, up nearly $100 from last Friday's closing price. The market is waiting for the Federal Reserve's policy decision later this week.

The US dollar index fell 0.2% on Monday, causing a decrease in the price of gold for holders of other currencies; The market is weighing the ongoing uncertainty of President Trump's tariff policies and their impact on the economy.

Marc Chandler, Chief Market Strategist at Bannockburn Global Forex, said that the weakening of the US dollar against Asian currencies is partly due to some investors clearing a large number of unfilled positions after news of the US imposing more tariffs.

Chandler said, "The US dollar has been sold off in Asia, partly due to concerns that the US will announce tariffs on semiconductors as early as Wednesday, and rumors that the US may allow East Asian currencies to appreciate in these bilateral trade negotiations.

US President Trump announced on Sunday a 100% tariff on films produced overseas, once again raising concerns about the potential consequences of a global trade war.

Treasury Secretary Besson defended Trump's tariff measures on Monday, emphasizing that his broader agenda, including tax cuts, will ultimately lead to long-term economic growth.

Juan Perez, the trading director of Monex USA in Washington, said that Trump's important stance on tariffs has not been abandoned, which has had an impact on the market.

Jim Wyckoff, Senior Analyst at Kitco Metals, said, "We see continued safe haven demand flowing in, keeping gold prices high... At least in the short term, gold prices will trade above $3000. I don't think there will be any changes in interest rates at this meeting, but we will keep an eye on it and see if the Federal Reserve has any particular inclination

Traders are waiting for comments from Federal Reserve Chairman Powell on Wednesday to obtain clues about the path of interest rates. The Federal Reserve has maintained its policy rate in the range of 4.25% to 4.50% since December.

It is expected that the Federal Reserve will maintain interest rates unchanged at this meeting, but this may be the last time the outcome is so clear, as Trump's tariff policy has cast a shadow of uncertainty over the economic outlook.

Trump stated that he will not dismiss Federal Reserve Chairman Powell before the end of his term, but he reiterated his call for lower interest rates and called Powell a "rigid person". The Federal Reserve will end its two-day meeting on Wednesday, and the market generally expects the Fed to keep interest rates unchanged. The March employment report released last Friday was robust.

Gold is considered a tool for hedging uncertainty and often shines in low interest rate environments. It has hit historic highs multiple times so far this year, with gains exceeding 26%.

Goldman Sachs expects gold to continue outperforming silver, but also points out that given the strong correlation of capital flows, the recovery of gold demand in 2025 may also boost silver prices.

Perez said that market chaos has the greatest impact on the US dollar. "I think today we are back to... this very low mood and downward trend, and people are beginning to realize that, on the whole, they can't rely on the U.S. market as they used to. This phenomenon has also emerged in the U.S. treasury bond bond market."

At present, the market suggests that the possibility of the Federal Reserve cutting interest rates in June is only 37%, lower than 64% a month ago. Goldman Sachs and Barclays have both postponed their interest rate cut expectations from June to July.

The Bank of England will hold a meeting on Thursday, and the market generally expects to further cut interest rates by 25 basis points to 4.25%. The Norwegian and Swedish central banks will also hold meetings this week and are expected to keep interest rates unchanged.

The growth of the US service industry rebounded in April, while indicators measuring the prices of materials and services paid by businesses soared to their highest level in over two years, indicating that inflationary pressures caused by tariffs are increasing.

A survey by the Institute for Supply Management (ISM) on Monday showed that US service industry companies are concerned about the impact of President Trump's tariffs on prices and the government's pursuit of significant spending cuts leading to a sharp decline in federal spending.

Trump's unpredictable tariff policies have exacerbated economic uncertainty. In the ISM survey, some real estate, leasing, and rental companies described the implementation of tariffs as "unpredictable and frustrating".

The negative impact of tariffs and government spending cuts on service industry activity and inflation is undeniable and has begun to manifest, "said Scott Anderson, Chief US Economist at BMO Capital Markets. If there is no reversal in US tariffs and government spending cuts, we expect the ISM services index to continue facing downward pressure. "

ISM reported that the Non Manufacturing Purchasing Managers' Index (PMI) for April rose from 50.8 in March to 51.6. Economists previously predicted that the service sector PMI would drop to 50.2.

Part of the reason for the increase in the service sector PMI in April may be due to businesses and households purchasing ahead of the implementation of tariffs. The new order index in the ISM survey rose from 50.4 in March to 52.3.

Although the decline of the US dollar index slightly narrowed after the data was released, gold prices held their gains and even further rose in the late trading session, indicating that the support for safe haven and bargain hunting buying is relatively strong, and investors need to be cautious of the risk of further gold price surges.

On this trading day, the US March trade account will be released, and investors need to pay attention to it. In addition, they need to continue to monitor the relevant news of the geopolitical situation and international trade situation.