The Record Gold Rally Continues
With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr Too Late, a major loser, lowers interest rates, NOW’, US President Donald Trump wrote about Federal Reserve (Fed) Chair Jerome Powell on his social media platform, Truth. Trump’s main goal is now to force a quick cut in interest rates to soften the effect of his tariff policies and reduce the negative impact on the economy and job market. Imposing import taxes on major trading partners has led to a drop in economic activity. After trade tariffs were introduced, the Conference Board’s index of leading economic indicators fell by 0.7% in March, signalling a slowing economy.
“Investors have been giving a wide berth to US assets amid tariff worries and Trump-Powell dramas, which has kept gold in prime position to capitalise on the dollar’s woes”, said Tim Waterer, chief market analyst at KCM Trade.
“There remains a chance of a pullback given the rapid rate of gains on display so far this month. But there is reason to believe that buyers will be keen on gold should a pullback occur given that high economic uncertainty remains a prevailing market theme”, he added.
rose by 2.00% during the Asian and early European trading sessions. Investors await more Powell’s statements to get clues on the path and Fed plans. However, any news around trade tariffs will likely have a stronger effect than inflation statistics. Key levels to watch are resistance at $3,500 and support at $3,460.
Euro Continues to Strengthen Due to Weak US Dollar
Markets will likely expect further by the European Central Bank (ECB) as they believe a trade war with the US will hit the eurozone economy. The ECB emphasised the worsening economic growth outlook due to trade tensions, which have caused ’exceptional uncertainty’. The regulator also removed a reference to interest rates as being ’restrictive’ from its policy statement.
Over the past week, we’ve seen a group of clients push their hedges out to the maximum available tenor as they look to lock in protection and ride out near-term instability,’ said Eric Huttman, CEO of MillTechFX. The euro (), which neared parity with the in February, has now risen by over 10% since early March and reached 1.15400. The currency’s strengthening is expected to reduce the cost of imports and ease inflationary pressures. A key measure of long-term —closely monitored by the ECB—now aligns with the bank’s 2% target, down from 2.2% in March. The data suggests that inflation could dip below the target, potentially opening the door for further interest rate cuts.
EUR/USD rose during the Asian and early European trading sessions. Today, the main focus is on the E.U. report at 2:00 p.m. UTC. Traders should also pay attention to the speeches of the ECB and Federal Reserve officials. Key levels for EUR/USD to watch are resistance at 1.16000 and support at 1.14000.
Australian Dollar Hits Four-Month High
The Australian dollar () rose by 0.27% against the US dollar (USD) on Monday. Increased safe-haven demand for the Aussie after US President Donald Trump called for an supported the rise.
By Thursday, the Aussie had eased slightly towards around 0.64300. AUD/USD continued a rally that began last week following the release of weaker-than-expected Australian labour market data. Although the remained steady at a low 4.1%, employment growth for March fell short of forecasts. This has strengthened expectations that the Reserve Bank of Australia (RBA) will lower at its May meeting. A 25-basis-point (bps) cut is widely anticipated. Still, some market participants are beginning to price in a more aggressive 50-bps reduction amid growing fears of a global economic slowdown driven by trade tensions.
During the Asian and early European trading sessions, AUD/USD maintained upward momentum. Traders should follow upcoming speeches from European Central Bank and Federal Reserve (Fed) officials. Key technical levels to watch are resistance at 0.64500 and support at 0.64000.