The gold (XAU) price rallied by 1.9% on Thursday, setting a new all-time high just a few dollars away from a major $3,000 milestone. Trade tariff uncertainty, geopolitical instability, and expectations that the Federal Reserve (Fed) will continue to ease its monetary policy drove the momentum.
Howard Lutnick, the U.S. Commerce Secretary, said yesterday that an economic recession would be ’worth it’ to get U.S. President Donald Trump’s economic policies in place. Meanwhile, Trump threatened additional 200% duties on European beverage imports. These threats stoke worries about global trade tensions and their potential impact on inflation and economic growth. Thus, global equities and U.S. Treasury yields moved lower.
Additionally, Trump said that the U.S. would annex Greenland, contributing to heightened geopolitical uncertainty. This gave XAUUSD an additional boost as investors sought a safe haven amidst the renewed speculation about international tensions. ’Gold is in a secular bull market. We forecast prices to trade between $3,000–$3,200 this year’, said Alex Ebkarian, chief operating officer at Allegiance Gold. ’Strong ETF (exchange-traded fund) demand and continued central bank buying in a backdrop of geopolitical uncertainty and the continued uncertainty created by tariff changes has really continued to stoke appetite for gold’, said Suki Cooper, Standard Chartered (OTC: SCBFF ) analyst. SPDR Gold Trust (P: GLD ), the world’s largest gold-backed ETF, reported a rise in its holdings towards 907.82 metric tons on 25 February, the highest since August 2023.
XAUUSD fell slightly during the Asian and early European trading sessions. Today, the University of Michigan (UoM) will release a preliminary report on U.S. Consumer Sentiment and inflation expectations at 2:00 p.m. UTC. Lower-than-expected figures might increase the chances of more rate cuts by the Fed later this year, pushing XAUUSD higher. Conversely, higher-than-expected results may temporarily pause the rally in gold. ’Spot gold may climb into a range of $3,017 to $3,040 per ounce, as it has travelled above a key barrier at $2,979’, said Reuters analyst Wang Tao.
The euro (EUR) lost 0.31% against the U.S. dollar (USD) on Thursday as the greenback recovered from its multi-month low set on 11 March.
U.S. Labor Department data on Thursday showed unexpectedly unchanged monthly U.S. producer prices in February. Still, the prospects of tariffs are unlikely to keep prices down in the coming months. A Jobless Claims report was also stronger than expected, supporting the U.S. dollar. ’We’ve had a very large dollar-weakening move in the previous days and weeks, and it feels like we’re entering a bit of a consolidation period now. We do see the possibility that the dollar recovers because we’re still being hit with tariff news, and we have this early April reciprocal tariff deadline coming up’, said Vassili Serebriakov, FX strategist at UBS.
At the same time, EURUSD got additional support from Germany’s fiscal reset plan. ’The market is very hopeful that the package will help to increase Germany’s growth’, said Michael Pfister, FX analyst at Commerzbank (ETR: CBKG ). Fundamentally, there isn’t much divergence in monetary policy expectations between the European Central Bank (ECB) and the Federal Reserve (Fed). Both central banks are expected to deliver roughly 50 basis points worth of rate cuts this year.
EURUSD remained relatively unchanged during the Asian and early European trading sessions. Today, EURUSD may face increased volatility. The UoM Consumer Sentiment report will come out at 2:00 p.m. UTC and may affect EURUSD. Also, the potential news regarding trade tariffs and the German fiscal plan contribute to market uncertainty. Key levels to watch are resistance at 1.08920 and support at 1.08160.
Bitcoin (BTC) plunged by more than 3% on Thursday, mirroring the decline in major U.S. stock indices. Unnerved by U.S. President Donald Trump’s renewed tariff threats, investors sought refuge in safer assets.
BTCUSD is a highly risk-sensitive asset that closely tracks the performance of the U.S. benchmark equity markets, particularly the Nasdaq. The Nasdaq and the S&P 500 have dropped below their 200-day moving averages on fears of global recession induced by the protectionist trade war. ’If it wasn’t for the trade war going on, the market would be up strongly on the inflation data. Traders are focused on the trade war. It seems like the (U.S.) administration is being very aggressive and promises at least at this point to be in it for the longer term, and the personalities look unlikely to back down at least in the near term’, said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder.
Fundamentally, the regulatory environment for the crypto industry has been improving lately. On 6 March, President Trump issued an executive order declaring the ’Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile’. The order indefinitely prohibits the sale of any Bitcoin deposited in the Reserve, but it didn’t mention any additional purchases. This is something many market participants had hoped for. When Bitwise predicted that Bitcoin would hit $200,000, it relied on the prospect of strategic Bitcoin purchases. Now, this seems to be not happening. As far as Bitcoin ETFs perform poorly, the picture is grim. According to SoSoValue, Bitcoin ETFs have seen an outflow of $5 billion since February.
BTCUSD recovered during the Asian and early European trading sessions. Today, Bitcoin’s price is expected to be volatile, heavily influenced by news and developments surrounding global trade tariffs. In addition, the U.S. Consumer Sentiment report, due at 2:00 p.m. UTC, may trigger a strong reaction in BTCUSD.