- Gold's movements on Monday remained below the historic peak, trading under the $3,000 per ounce level that was breached last Friday.

- Bullish gold traders appear hesitant to place fresh bets, preferring to stay on the sidelines ahead of key central bank decisions this week – the highly anticipated Bank of Japan (BoJ) policy decision and the outcome of the two-day Federal Open Market Committee (FOMC) meeting (Tuesday and Wednesday).

- Meanwhile, concerns about escalating trade tensions and their impact on the global economy, along with geopolitical risks, continue to support gold's safe-haven status. Additionally, bets that the Federal Reserve (Fed) will cut interest rates multiple times in 2025 and the weak US Dollar are underpinning the non-yielding yellow metal. However, the positive risk tone, bolstered by optimism over China’s stimulus measures announced over the weekend, is capping gold's rise.

- US Treasury Secretary Scott Bessent said late Sunday that he is not concerned about the recent market downturns because corrections are considered healthy and normal. Commenting on the potential for a recession, Bessent added that there are no guarantees.

- Concerns about the potential economic fallout from the trade tariffs imposed by US President Donald Trump continue to act as a tailwind for gold’s safe-haven appeal.

- On the geopolitical front, Houthi leader Abdul Malik al-Houthi, following deadly US airstrikes, said on Sunday that his militants would target US ships in the Red Sea as long as the US continues its attacks on Yemen.

- Market participants are pricing in the possibility that the Federal Reserve will lower interest rates several times this year amid worries of an economic downturn due to Trump’s aggressive trade policies. This comes alongside weaker US inflation figures released last week and signs of a cooling labor market, strengthening expectations for further policy easing by the US central bank.

- Federal Reserve interest rate futures indicate that the Fed may cut borrowing costs by 25 basis points at the June, July, and October monetary policy meetings. These expectations were further reinforced by the University of Michigan surveys on Friday, which showed that the Consumer Sentiment Index dropped to its lowest level in nearly two and a half years in March. This keeps US Dollar bears defensive near a multi-month low.

- China’s State Council announced a special action plan on Sunday aimed at stimulating domestic consumption and introduced measures to increase household incomes. In addition, Shenzhen, China, eased its housing provident fund loan policies to stimulate the real estate market and clear the overhang. This, in turn, boosts investor confidence and limits any meaningful gains for the yellow metal.

- Traders are now looking ahead to the US economic calendar on Monday, which includes the release of monthly Retail Sales and the Empire State Manufacturing Index, for some momentum during the US session.

- However, the focus will remain on the crucial Federal Open Market Committee (FOMC) decision on Wednesday, which will influence the dynamics of the US Dollar and provide fresh directional momentum for the non-yielding yellow metal.

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