Tag: Fundamental Analysis

  • Gold surges past ,400 on Israel-Iran war risk, soft US inflation boosts safe-haven demand

    Gold surges past $3,400 on Israel-Iran war risk, soft US inflation boosts safe-haven demand


    • Bullion rallies to five-week high amid geopolitical tension and dovish Fed outlook
    • Israel strikes Iran, fueling fears of broader war and driving flight to safety into Gold.
    • XAU/USD hits $3,446 before easing on profit-taking; eyes next week’s Fed decision and US data slate.

    Gold price rallied for the third consecutive day after the Israel-Iran conflict erupted on Friday, triggering a risk-off mood in financial markets as fears that it could escalate loom. At the time of writing, XAU/USD trades at $3,422, up more than 1%.

    Several factors underpin bullion. On Friday, Israel’s attack on Iran’s military installations, nuclear facilities and senior officials augmented tension in the area. After the attack,  XAU/USD reached a five-week high of $3,446 before retreating somewhat to its current levels as traders booked profits ahead of the weekend.

    Softer US CPI and PPI strengthen bets on Fed rate cuts despite improving consumer sentiment

    Another factor was that inflation in the United States (US) continued to ease following the release of the Consumer Price Index (CPI) and the Producer Price Index (PPI) figures for May. Recently, a University of Michigan (UoM) Consumer Sentiment survey revealed that households are becoming more optimistic about the economy, yet they remain worried about higher prices.

    US President Donald Trump hinted that Iran brought the attack on itself, as Washington warned Iran to restrict its nuclear program.

    Next week, traders will be watching the release of the Federal Reserve’s (Fed) monetary policy meeting, where officials will update their economic projections. Besides this, Retail Sales, Industrial Production, housing and jobs data could help dictate Gold’s direction.

    Daily digest market movers: Gold price surges on risk aversion

    • Recently, US President Trump said to Axios that Israel’s attack could help him reach an agreement with Iran. He urged Iran to make a deal, adding, “There has already been great death and destruction, but there is still time to make this slaughter, with the next already planned attacks being even more brutal, come to an end.”
    • The University of Michigan (UoM) Consumer Sentiment report in June showed that households are becoming more optimistic about the economy. The Sentiment Index rose from 52.2 to 60.5, while inflation expectations decreased for both one-year and five-year periods, from 6.6% to 5.1% and from 4.2% to 4.1%, respectively.
    • Although the data is positive and clears the path for the Federal Reserve to ease policy, the escalation of the Middle East conflict pushed Oil prices up by more than 6%. This suggests that Gasoline prices could increase, and that a reacceleration of inflation looms.
    • US Treasury yields are recovering, with the US 10-year Treasury yield climbing over seven basis points (bps) to 4.436%. US real yields followed suit, rising seven basis points to 2.186%, capping Bullion’s advance.
    • The Greenback rises after hitting three-year lows, according to the US Dollar Index (DXY). The DXY, which tracks the value of the Dollar against a basket of peers, is up 0.30% at 98.15 after hitting a multi-year low of 97.60.
    • Goldman Sachs reiterated that the price of Bullion would rise to $3,700 by the end of 2025 and $4,000 by mid-2026. Bank of America (BofA) sees Gold at $4,000 over the next 12 months.
    • Money markets suggest that traders are pricing in 47 basis points of easing toward the end of the year, according to Prime Market Terminal data.

    Source: Prime Market Terminal

    XAU/USD technical outlook: Gold price consolidates near $3,400

    Gold price is set to extend its gains past the $3,450 figure, clearing the path to challenge the record high of $3,500 in the near term. The Relative Strength Index (RSI) shows that momentum remains bullishly biased, and with that in mind, the path of least resistance is tilted to the upside.

    Conversely, if XAU/USD tumbles below $3,450, the first support would be the $3,400 mark. If it surpasses, the next stop would be the 50-day Simple Moving Average (SMA) at $3,281, ahead of the April 3 high-turned-support at $3,167.

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.



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  • EUR/USD extends gains on dovish US CPI, flirts with 1.15

    EUR/USD extends gains on dovish US CPI, flirts with 1.15


    • EUR/USD advances as lower US inflation sparks calls for aggressive Fed rate cuts.
    • Trump urges full percentage point cut in Fed funds rate post-CPI.
    • ECB policymakers cautious, but inflation outlook hints at further fine-tuning.

    The EUR/USD surged during the North American session but remains shy of clearing the 1.1500 figure, following the release of a softer-than-expected inflation report in the United States (US), which could prompt the Federal Reserve (Fed) to reduce borrowing costs in the near term. At the time of writing, the pair trades at 1.1482, up by over 0.50%.

    US data revealed that the Consumer Price Index (CPI) in May fell short of estimates as prices continued to trend lower. Following the data release, US President Donald Trump posted on his social network that the Fed should lower the fed funds rate by one whole percentage point.

    Although inflation edged lower, some analysts project that households in the upcoming month will feel the impact of tariffs. Meanwhile, positive trade news regarding negotiations between the US and China emerged, as the Wall Street Journal (WSJ) revealed that China is putting a six-month limit on rare-earth export licenses for US automakers and manufacturers.

    Meanwhile, in the Eurozone (EU), European Central Bank (ECB) policymakers made headlines, although they failed to move the EUR/USD pair. The ECB’s Vujcic said that he is looking for more clarity on trade, while Kazaks noted that it is “quite likely that 2% inflation will require some further cuts for fine-tuning,” said via Econostream on X.

    The ECB Chief Economist, Philip Lane, added that last week’s rate cut helped clarify the bank’s policy stance to bring inflation toward its target.

    Ahead in the week, the EUR/USD is expected to be greatly influenced by the release of the US Producer Price Index (PPI) numbers, along with the Initial Jobless Claims report. Across the pond, the EU’s schedule is scarce on economic data, but ECB officials led by Vice-President Luis de Guindos will cross the wires.

    Euro PRICE This week

    The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the US Dollar.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -0.85% -0.19% -0.32% -0.19% -0.12% -0.23% -0.28%
    EUR 0.85% 0.65% 0.51% 0.65% 0.76% 0.62% 0.56%
    GBP 0.19% -0.65% -0.04% 0.00% 0.12% -0.03% -0.08%
    JPY 0.32% -0.51% 0.04% 0.12% 0.15% 0.03% -0.08%
    CAD 0.19% -0.65% -0.01% -0.12% 0.06% -0.04% -0.09%
    AUD 0.12% -0.76% -0.12% -0.15% -0.06% -0.14% -0.19%
    NZD 0.23% -0.62% 0.03% -0.03% 0.04% 0.14% -0.05%
    CHF 0.28% -0.56% 0.08% 0.08% 0.09% 0.19% 0.05%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

    Daily digest market movers: EUR/USD soars past 1.1480 as traders shift toward US PPI data

    • EUR/USD appears poised to test the 1.1500 mark in the near term as positive news about US-China talks could increase appetite for riskier assets and weigh on the US Dollar.
    • US Treasury Secretary Scott Bessent commented that trade fairness with China could be achieved through reduced exports to the US or by rebalancing the world’s largest economies. He added that the Trump administration is committed to maintaining the US Dollar’s reserve currency status.
    • US inflation came in softer than expected in May. Headline CPI rose 2.4% YoY, slightly above April’s 2.3% but below the 2.5% forecast. Core CPI held steady at 2.8% YoY, suggesting underlying inflation remains stable but persistent.
    • The PPI for May is projected to increase from 2.4% to 2.6% YoY. Underlying PPI figures are expected to remain at 3.1% higher, unchanged compared to April’s print.
    • Financial market players do not expect that the ECB would reduce its Deposit Facility Rate by 25 basis points (bps) at the July monetary policy meeting.

    Euro technical outlook: EUR/USD bulls eyes 1.15 and the YTD high

    From a technical perspective, the uptrend is expected to continue as buyers target a clear break above the 1.1500 figure. This will expose the year-to-date (YTD) high of 1.1572, ahead of 1.1600. The Relative Strength Index (RSI) is bullish, indicating an upward direction, which suggests that buyers are gaining momentum.

    The less likely scenario on the downside is that the EUR/USD needs to clear the 1.1450 area. This would set the pair for a pullback toward the 20-day Simple Moving Average (SMA) at 1.1346 before testing 1.1300.

    ECB FAQs

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region.
    The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa.
    The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro.
    QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.

    Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.



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  • GBP/USD slips as strong US jobs data cools Fed rate cut bets

    GBP/USD slips as strong US jobs data cools Fed rate cut bets


    • Sterling still set for weekly gain over 0.80% amid broad Greenback weakness earlier in the week.
    • US economy added 139K jobs in May, beating forecasts and reinforcing Fed’s cautious stance on rate cuts.
    • Dollar strength resurfaces, with DXY climbing 0.58% to 99.28, its highest in two days.

    GBP/USD tumbled during the North American session, down over 0.30% after the latest jobs report in the United States (US) maintained the status quo, with the economy remaining strong. The pair traded at 1.3526 after hitting a daily high of 1.3586.

    Pound retreats below 1.3550 after NFP beats estimates, lifting the US Dollar and dampening dovish expectations

    US Nonfarm Payroll figures in May exceeded estimates of 130K, rising by 139K, which was below April’s downwardly revised 147K. Although the jobs market shows that it’s softening, beating economists’ estimates, it pushed aside traders’ bets that the US Federal Reserve (Fed) will cut interest rates in 2025.

    The data revealed that the Unemployment Rate remained unchanged at 4.2%, and that the Federal Government cut 10,000 jobs in the past month.

    A scarce economic docket in the UK, kept GBP/USD traders leaning onto US news. In addition, Sterling is poised to post gains of over 0.80% in the week, sponsored fy broad UA Dollar weakness.

    Despite this, the buck has recovered some ground, as depicted by the US Dollar Index (DXY). The DXY, which tracks the value of the American dollar against a basket of six currencies, climbed 0.58% to 99.28, its highest level in two days.

    Next week, the UK economic docket will feature jobs data and gross Domestic Product (GDP) figures for April. Across the pond, the US schedule will announce the latest Consumer Price Index (CPI), followed by the Producer Price Index (PPI) and the University of Michigan Consumer Sentiment.

    British Pound PRICE This week

    The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Japanese Yen.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -0.32% -0.40% 0.75% -0.35% -0.75% -0.76% 0.08%
    EUR 0.32% -0.08% 1.07% -0.03% -0.43% -0.46% 0.39%
    GBP 0.40% 0.08% 1.22% 0.05% -0.35% -0.38% 0.46%
    JPY -0.75% -1.07% -1.22% -1.09% -1.49% -1.51% -0.76%
    CAD 0.35% 0.03% -0.05% 1.09% -0.40% -0.43% 0.42%
    AUD 0.75% 0.43% 0.35% 1.49% 0.40% 0.02% 0.90%
    NZD 0.76% 0.46% 0.38% 1.51% 0.43% -0.02% 0.85%
    CHF -0.08% -0.39% -0.46% 0.76% -0.42% -0.90% -0.85%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

    GBP/USD Price Forecast: Technical outlook

    The trend remains up, as GBP/USD buyers tested the 20-day Simple Moving Average (SMA) at 1.3509. If this level holds, the pair’s direction would likely resume in the short term after making successive series of higher highs and higher lows, warranting further upside.

    However, momentum has taken a hit. The Relative Strength Index (RSI) is aiming lower, hints that sellers are moving in.

    If GBP/USD stays above 1.3500, this opens the door for a move to 1.3584 today’s high, followed by the year-to-date (YTD) high at 1.3616. On the other hand, a daily close below 1.35 could sponsor a drop towards April’s 28 sing high turned support at 1.3443 ahead of the 1.34 mark.

    Pound Sterling FAQs

    The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data.
    Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).

    The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
    When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
    When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.

    Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
    A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.

    Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
    If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.



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  • Gold price falls below ,300 on strong US Dollar as Trump reignites China tensions

    Gold price falls below $3,300 on strong US Dollar as Trump reignites China tensions


    • XAU/USD drops as strong US Dollar pressures Bullion; tariff uncertainty rattles markets.
    • US core PCE dips in April, but strong data lifts yields, dampening Gold’s appeal.
    • Trump accuses China of violating trade deal, reviving geopolitical and tariff concerns.

    Gold price slumped on Friday as the US Dollar recovered some ground despite witnessing a drop in US Treasury bond yields following a strong inflation report, which keeps traders hopeful that the US Federal Reserve (Fed) will ease policy in 2025. XAU/USD trades at $3,289, down 0.83%.

    Sentiment shifted sour as US President Donald Trump complained that China is not fulfilling the agreement negotiated between both parties in Switzerland. He wrote, “China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”

    Consequently, US equities fell, while the American Dollar recovered from near daily lows, according to the US Dollar Index (DXY).

    Turning to trade-related news, a US Federal Appeals Court reinstated most of Trump’s tariffs imposed on April 2, “Liberation Day,” following a decision by a US Court of International Trade, which blocked most of the duties as they were considered illegal.

    The US Core Personal Consumption Expenditures (PCE) Price Index dipped in April compared to March’s meeting. Other data showed that the University of Michigan’s (UoM) Consumer Sentiment in May’s final reading improved compared to estimates, while inflation expectations declined.

    Gold daily market movers: Tumbles despite soft US inflation data amid US Dollar strength

    • Gold price is pressured due to a strong US Dollar.The DXY, which tracks the US Dollar’s value against a basket of six currencies, edges up 0.11% to 99.44.
    • US Treasury bond yields are falling. The US 10-year Treasury note yield falls two basis points to 4.40%, while US real yields are also edging down by the same amount 2.086%, slightly below the May 29 close.
    • The US core PCE in April showed the evolution of the disinflation process, which was driven by the Fed’s restrictive interest rates. The reading came in at 2.5% YoY, down from 2.6%. Headline inflation came in at 2.1% YoY, below March’s 2.3% rise.
    • Despite witnessing a lower inflation environment, Bullion prices failed to gain traction as US Dollar short positions in the futures market were trimmed in the last week, according to Commitments of Traders (COT) data.
    • The UoM Consumer Sentiment in May improved from 50.8 to 52.2, exceeding estimates on its final reading. It is worth noting that inflation expectations fell. For the 12 months ahead, expectations fell from 7.3% to 6.6%, and for the next five years, they dropped from 4.6% to 4.2%.
    • After the data release, the Atlanta Fed’s GDPNow preliminary reading of economic growth for Q2 2025 rose sharply from 2.2% to 3.8%.
    • Federal Reserve officials crossed the wires on Thursday, emphasizing that the monetary policy is in a good place and that it would take some time to see a shift in the balance of risks for the Fed’s dual mandate.
    • San Francisco’s Fed President Mary Daly said the labor market is in solid shape and revealed that it would not reach the 2% inflation goal in 2025. Despite this, she said that if jobs are solid and the disinflation process continues, it would make sense to cut rates twice as markets expect.
    • Money markets suggest that traders are pricing in 52 basis points of easing toward the end of the year, following the release of US data, according to Prime Market Terminal data.

    Source: Prime Market Terminal

    XAU/USD technical outlook: Tumbles and poised to test $3,250

    Gold price uptrend is intact, though XAU/USD spot prices achieving a daily/weekly close below $3,300 could sponsor some sideways trading action within the $3,250-$3,300 range amid the lack of fresh catalysts ahead of the weekend.

    For a bearish resumption, sellers must drive Gold prices below $3,250, ahead of the 50-day Simple Moving Average (SMA) at $3,221. A breach of the latter will expose the April 3 high turned support at $3,167.

    Conversely, if bulls push XAU/USD past $3,300, the next key resistance levels will be $3,350, $3,400, the May 7 swing high of $3,438 and the record high $3,500.

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.



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  • Gold price falls below ,300 on strong US Dollar as Trump reignites China tensions

    Gold price slumps beneath $3,300 as Fed Minutes signal stagflation risks and patience


    • Gold drops 0.27% after Fed cites tariff-driven inflation concerns; yields rebound, stalling bullion’s rally.
    • Fed minutes highlight risks of persistent inflation and weakening job growth, prompting cautious rate stance.
    • US bond yields rebound, lifting the Dollar and pressuring Gold below $3,300.
    • Goldman Sachs urges increased Gold exposure amid rising geopolitical risks and central bank demand.

    Gold price extended its losses during the North American session on Wednesday after hitting a daily high of $3,325 earlier in the day, as market participants digested the latest Federal Reserve (Fed) policy minutes. At the time of writing, XAU/USD trades below $3,300, resulting in a solid 0.27% decline.

    On May 6-7, the Fed decided to keep rates unchanged, citing uncertainty about the impact of tariffs on the economy. Officials adopted a patience approach due to increased risks of high inflation and unemployment, fueled by the potential impact of tariffs.

    Policymakers acknowledged some stagflation risks as they noted the “Committee might face difficult tradeoffs if inflation proves to be more persistent while the outlooks for growth and employment weaken.”

    Therefore, the Fed has taken a cautious approach regarding monetary policy, waiting for the “net economic effects of the array of changes to government policies to become clearer.” It is worth noting that the Fed meeting took place before Trump reduced tariffs on China from 145% to 30%.

    Bullion’s rally appears to have stalled during the week, as US Treasury bond yields recovered some of the previous week’s fall, underpinning the US Dollar. However, a surprise dovish tilt in the minutes, the less likely scenario, could drive XAU/USD prices higher.

    On Tuesday, Fox Business News Gasparino, in a post on X, revealed that a framework between the US and India is close to being announced. It should be noted that the US has taken a more flexible approach to trade talks.

    Despite this, the Gold upside remains due to increasing geopolitical tensions between Russia and Ukraine, as well as the Middle East conflict involving Israel and Hamas.

    Goldman Sachs analysts recommended a higher-than-usual allocation to Gold in long-term portfolios, revealed Reuters. They cite elevated risks to US institutional credibility, pressure on the Fed, and sustained central bank demand.

    Ahead in the week, the docket will feature the second estimate for Gross Domestic Product (GDP) in Q1 2025, and the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index.

    Gold daily market movers: Bullion retreats on strong US Dollar and high US yields

    • US Treasury bond yields are rising as the 10-year Treasury note yield increases by four and a half basis points (bps) to 4.493%. Meanwhile, US real yields also advance four bps at 2.171%.
    • The US Dollar Index (DXY), which tracks the buck’s value against a basket of six currencies, rises over 0.33% to 99.89, fueled by an improvement in Consumer Confidence data, which grew the most in four years, revealed the Conference Board .
    • New York Fed President John Williams said that inflation expectations are well-anchored and added that he wants to avoid inflation becoming highly persistent, as that could become permanent.
    • Data revealed that Gold imports to Switzerland from the US rose to its highest level since at least 2012 in April.
    • Besides this, Reuters revealed that “China’s net gold imports via Hong Kong more than doubled in April from March, and were the highest since March 2024, data showed.”
    • Money markets suggest that traders are pricing in 45 basis points of easing toward the end of the year, according to Prime Market Terminal data.

    Source: Prime Market Terminal

    XAU/USD technical outlook: Gold price pullback to challenge $3,250

    Gold prices have consolidated within the $3,280-$3,330 range over the last four trading sessions, as bullish momentum appears to be fading due to technical reasons. Momentum, as measured by the Relative Strength Index (RSI), is aiming toward its 50-neutral line, which if broken, could sponsor a leg-lower in XAU/USD prices.

    For a continuation of the uptrend, bulls must clear $3,300, $3,400 and the May 7 swing high of $3,438. If achieved, Gold’s next goal would be $3,500.

    On the downside, Gold tumbling below $3,250 could expose a move to the 50-day Simple Moving Average (SMA) at $3,211, followed by the May 20 daily low of $3,204.

    Fed FAQs

    Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
    When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
    When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

    The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
    The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

    In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
    It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

    Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.



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  • Gold slips as Trump’s hits pause on EU duties amid thin trading volume

    Gold slips as Trump’s hits pause on EU duties amid thin trading volume


    • Gold price dips over 0.50% as improved sentiment trims haven flows after last week’s 4.86% surge.
    • Trump postpones 50% EU tariffs to July 9, easing short-term trade war fears.
    • Strong Chinese Gold imports and Russia-Ukraine tensions keep the bullish outlook intact.

    Gold price drops more than 0.50% on Monday amid the lack of demand for haven assets after United States (US) President Donald Trump delayed tariffs on the European Union (EU). In the meantime, trading remains thin due to the closure of the United Kingdom (UK) and US financial markets for holidays. At the time of writing, XAU/USD trades at $3,336.

    Market mood improved on Trump’s statement on Sunday, pushing back the enactment of duties on EU products until July 9. Therefore, Bullion is pressured following last week’s gains of over 4.86%, the most significant increase since the week starting on April 7.

    On Friday, XAU/USD extended its bullish move as Trump continued to pressure Apple (AAPL) to make iPhones in the US. If not, 25% of duties would be imposed. At the same time, he escalated the rhetoric against the EU, threatening to impose 50% tariffs on its goods. This drove the golden metal from $3,287 to last week’s highest high of $3,365.

    Despite retreating, Gold prices are set to continue rallying, as Reuters revealed that “China’s net gold imports via Hong Kong more than doubled in April from March, and were the highest since March 2024, data showed.”

    Additionally, geopolitical risks remain high after Russia attacked Ukraine for the third straight night, spurring an angry reaction on Trump.

    This week, the US economic docket will feature April Durable Goods Orders, the Federal Open Market Committee (FOMC) meeting minutes, the second estimate for Q1 2025 Gross Domestic Product (GDP) and the release of the Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation gauge.

    Gold daily market movers: Improvement in risk appetite weighs on Gold prices

    • US Treasury bond yields remain steady. The 10-year Treasury note yield fell two basis points (bps) on Friday to 4.509%. Meanwhile, US real yields were down as well, one 4 bps to 2.179%.
    • Gold price outlook is optimistic, given the fragile market mood toward US assets sparked by the growing fiscal deficit in the United States, which ignited Moody’s downgrade of US government debt from AAA to AA1.
    • The fiscal package approved by the US lower house is projected to raise the debt ceiling by $4 trillion.
    • The US Dollar Index (DXY), which tracks the buck’s value against a basket of six currencies, edged down 0.10% at 99.00, a tailwind for the Dollar-denominated precious metal.
    • Money markets suggest that traders are pricing in 47.5 basis points of easing toward the end of the year, according to Prime Market Terminal data.

    Source: Prime Market Terminal

    XAU/USD technical outlook: Gold’s uptrend to extend to $3,400

    Gold prices retreated slightly, and it seems traders are booking profits amid thin liquidity and low volatility in the US in observance of the holiday. Trump’s inconsistency regarding trade policies could keep prices swinging violently once trading resumes on Tuesday.

    From a technical perspective, Gold’s bull trend remains intact. If buyers achieve a daily close above $3,300, they could test last week’s high of $3,365. If surpassed, the next stop would be the $3,400 figure, followed by the May 7 high at $3,438 and the all-time high (ATH) at $3,500.

    On the bearish side, if Gold drops below $3,300, expect a move to the May 20 daily low of $3,204, ahead of the 50-day Simple Moving Average (SMA) at $3,199.

    Fed FAQs

    Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
    When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
    When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

    The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
    The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

    In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
    It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

    Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.



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  • EUR/USD snaps back above 1.1300 as Trump’s tariff salvo roils markets

    EUR/USD snaps back above 1.1300 as Trump’s tariff salvo roils markets


    • EUR/USD dips to 1.1296 after Trump announces steep tariffs on EU imports starting June 1.
    • The pair rebounds to 1.1350 as US Dollar stays pressured by rising fiscal deficit concerns.
    • Euro shrugs off ECB rate cut talk, supported by improving German GDP figures.

    EUR/USD recovered during the mid-North American session on Friday after diving below 1.1300 after US President Donald Trump rattled the markets by threatening to impose 50% tariffs on the European Union (EU). At the time of writing, the pair recovered and climbed to around 1.1350

    US President Donald Trump posted on his social network early Friday that discussions with the European Union “are going nowhere! Therefore, I am recommending a straight 50% tariff on the European Union, starting on June 1, 2025,” he wrote. The EUR/USD fell to 1.1296 on the remarks before the uptrend resumed.

    Following those remarks, US Treasury Secretary Scott Bessent said that “EU proposals have not been of good quality,” adding that “Most countries are negotiating in good faith, except the EU.”

    The Greenback remains on the back foot, weighed down by the approval of Trump’s tax bill in the House of Representatives, which is on its way to the Senate. If passed, the proposal would add close to $4 trillion to the US debt ceiling over a decade, according to the Congressional Budget Office (CBO).

    It is worth noting that the US Dollar remains unreactive to Federal Reserve (Fed) speakers, who so far have said the US Treasury market is working orderly, adding that uncertainty about supply chains, inventory and inflation keeps business executives unaware of the future.

    The US economic docket featured US housing data in May, which was mixed as Building Permits fell, but New Home Sales improved in April.

    In the Eurozone, Germany’s Gross Domestic Product (GDP) improved yearly, though it remained in contractionary territory.

    In the meantime, the Euro shrugged off speculation that the European Central Bank (ECB) is expected to lower interest rates at the upcoming meeting. ECB’s Rehn and Stournaras favor a rate cut in June, with the latter supporting a pause after that meeting.

    EUR/USD daily market movers: the Euro favored by “sell America” trend

    • The Euro remains favored by overall US Dollar weakness. The US Dollar Index (DXY), which tracks the performance of six currencies against the American Dollar, tumbled 0.79% at 99.10, its lowest level since April 29.
    • The “sell America” trend continues with investors selling off bonds, US equities and the US Dollar. It was ignited by US President Donald Trump’s “trade war” and Moody’s downgrade of US government debt from AAA to AA1.
    • The US schedule featured Building Permits, which fell by 4% MoM in April, declining from 1.481 million to 1.422 million, signaling a slowdown in future construction activity.
    • New Home Sales surged 10.9% MoM, rising from 0.67 million to 0.743 million, according to the US Census Bureau. This reflects strong demand in the housing market despite tighter supply conditions.
    • Germany’s economy grew in Q1 2025, exceeding estimates due to exports and industry frontloading ahead of US tariffs. The Gross Domestic Product (GDP) improved from 0.2% to 0.4% QoQ.

    EUR/USD technical outlook: Set to challenge 1.1400 in the near term

    The EUR/USD uptrend resumed on Friday, with the pair reaching a two-week high of 1.1375 as traders brace for challenging 1.1400. Buyers are gathering steam as the pair registered the highest high and low during the last five days, and further confirmed by the Relative Strength Index (RSI), which trends up ahead of turning overbought.

    If EUR/USD clears 1.1400, it would pave the way for testing key resistance levels, like 1.1450, followed by the 1.1500 mark and the year-to-date (YTD) high at 1.1573.

    Conversely, if EUR/USD falls below 1.1300, the pair could test the May 22 low of 1.1255, ahead of 1.1200.

    ECB FAQs

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region.
    The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa.
    The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro.
    QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.

    Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.



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  • Mexican Peso firms as US Dollar softens and Treasury yields climb

    Mexican Peso firms as US Dollar softens and Treasury yields climb


    • The Mexican Peso gains ground against the US Dollar as Moody’s downgrade of US sovereign debt weighs on the Greenback.
    • The Federal Reserve is set to review the discount rate on Monday, potentially influencing short-term funding conditions.
    • USD/MXN trades cautiously below the key psychological resistance at 19.50, reflecting broader Dollar weakness.

    The Mexican Peso (MXN) remains firm against the US Dollar (USD) as markets react to renewed uncertainty following Moody’s downgrade of the US credit rating. The decision to lower the sovereign rating to AA1 from AAA has prompted a reassessment of the US Dollar’s status. While the MXN slightly benefits from the USD’s weakness, the broader risk-off tone in the market causes the Mexican currency to fall against other peers such as the Euro (EUR), the Pound Sterling (GBP), or the Australian Dollar (AUD).

    While the Greenback has retained its global reserve status and safe-haven appeal, mounting concerns over trade tensions, tariff instability, and a deteriorating fiscal outlook are weighing on sentiment. Structural headwinds, including ballooning US debt and subdued growth prospects, have tempered interest rate expectations and contributed to the Greenback’s broad weakness.

    At the time of writing, USD/MXN is trading near 19.43, down 0.12% on the day. The former psychological support at 19.50 has now turned into a resistance barrier, with market participants watching to see whether the Peso can sustain its upward momentum.

    Mexican Peso daily digest: USD/MXN slides as cautious Fed tone and Moody’s downgrade weigh on the Dollar

    • Federal Reserve officials offered a cautious outlook, with Vice Chair for Supervision Philip N. Jefferson, New York Fed President John C. Williams, and Atlanta Fed President Raphael W. Bostic signaling policy vigilance amid fiscal concerns.
    • Dallas Fed President Lorie K. Logan and Minneapolis Fed President Neel Kashkari focused on market structure and broader economic risks, factors that continue to influence USD performance against emerging market peers like the Mexican Peso.
    • Moody’s became the latest major credit agency to downgrade the US sovereign rating, triggering a rise in Treasury yields and a slump in the DXY US Dollar Index.
    • As perceived credit risk rises, the US must offer higher interest rates to attract investors who might otherwise shift capital to alternative safe-haven assets. While rising yields tend to be supportive for the USD, the broader context of fiscal instability has the potential to weigh on the Greenback.
    • Comments from Fed speakers throughout the day may provide insights into the trajectory of US monetary policy, influencing the performance of the US Dollar against global counterparts, including USD/MXN. 
    • Persistent trade tensions between Mexico and the United States continue to create downside risks for the Peso. With roughly 80% of Mexican exports directed toward the US, any disruption or tariff-related uncertainty could magnify market volatility in the pair.

    Mexican Peso Technical Analysis: Peso holds gains as USD/MXN consolidates between key levels

    USD/MXN remains under pressure, extending its bearish trajectory beneath the descending trendline and the 20-day Simple Moving Average (SMA), currently at 19.55. The pair has failed to clear resistance near the 78.6% Fibonacci retracement level of the October–February rally at 19.578, reinforcing a weak technical outlook. 

    Price action continues to oscillate within a narrow range, with repeated failures to break higher indicating ongoing downside pressure.

    USD/MXN daily chart

    The consolidation zone between 19.30 (May low) and 19.72 (23.6% Fib) has acted as a containment range for several weeks. A breakdown below 19.30 could open the door toward the October 2024 low at 19.11, while a daily close above 19.72 would be needed to suggest a shift in sentiment and challenge the next key level at 19.98 (38.2% Fib).

    The Relative Strength Index (RSI) at 40.06 remains subdued, supporting the bearish bias while signaling a lack of upward momentum.

    US Dollar FAQs

    The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
    Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

    The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
    When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

    In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
    It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

    Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.



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  • Gold price falls below ,300 on strong US Dollar as Trump reignites China tensions

    Gold price climbs past $3,300 on uncertainty about trade and weak USD


    • Gold snaps two-day losing streak, gaining 1.5% on fresh trade war fears.
    • Trump softens tariff talk, but China denies negotiations and demands full rollback.
    • Fed rate cut bets rise as yields drop and economic uncertainty builds.

    Gold price snapped two days of losses on Thursday and rose $50, or more than 1.50%, amid renewed concerns about the US-China trade war. Even though US President Donald Trump softened his stance on sticking to 145% tariffs on Beijing, the XAU/USD trades at $3,338 after jumping off daily lows of $3,287.

    Market mood remains upbeat with Wall Street posting gains. Although traders seem relieved by Trump’s willingness to reach a deal with Beijing, China plays hardball and asks to cancel all “unilateral” US tariffs, clarifying that they have not held talks with the US government.

    Bullion prices advance underpinned by the plunge in US Treasury bond yields. The US Dollar Index (DXY) is also feeling the pain after hitting four-day peaks against a basket of six currencies.

    US economic data witnessed the release of Initial Jobless Claims for the last week, which was aligned with estimates. Durable Goods Orders jumped sharply in March, sponsored by airplane orders.

    Meanwhile, a wave of Federal Reserve (Fed) officials grabbed the headlines. Cleveland Fed President Beth Hammack stated the Fed could act as soon as June if the data supports it but emphasized that uncertainty is weighing on business planning.

    Fed Governor Christopher Waller echoed a similar tone, noting that while action in June remains on the table, rate cuts may be driven by a weakening labor market. Waller said, “rate cuts could come from rising unemployment.”

    Regarding the chances of the Fed reducing interest rates at the upcoming meeting, traders see a 94% chance of keeping them unchanged, according to Prime Market Terminal. Nevertheless, traders expect the Fed funds rate to end at 3.45%, equal to 86 basis points of easing (bps).

    Source: Prime Market Terminal

    Daily digest market movers: Gold price climbs boosted by weak US Dollar

    • The yield on the US 10-year Treasury note has decreased by seven-and-a-half basis points, reaching 4.31%.
    • US real yields collapsed seven bps to 2.023%, as shown by the US 10-year Treasury Inflation-Protected Securities yields.
    • US Durable Goods Orders soared in March from 0.9% to 9.2%, sponsored by aircraft bookings. Initial Jobless Claims for the week ending April 19 rose by 222K as expected, up from 216K in the previous reading.

    XAU/USD technical outlook: Gold price uptrend resumes as buyers reclaim $3,300

    The Gold price uptrend resumed, yet buyers must clear the April 22 high of $3,386 to prevent sellers from dragging lower prices. The next key resistance level would be $3,400, followed by the $3,450 and the $3,500 figure.

    On the other hand, if XAU/USD tumbles below $3,300, this could open the door to test $3,200 ahead of the April 3 peak of $3,167. A breach of the latter will expose the 50-day Simple Moving Average (SMA) at $3,041.

    US-China Trade War FAQs

    Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

    An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

    The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.



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  • Gold price explores past ,400 as Trump-Powell clash sparks Fed independence fears

    Gold price explores past $3,400 as Trump-Powell clash sparks Fed independence fears


    • Gold hits fresh all-time high as Trump attacks Powell, calling him “a major loser” for delaying rate cuts.
    • DXY plunges to 97.92 as Fed independence is questioned and stagflation risks remain in focus.
    • Traders brace for key Fed speeches this week from Jefferson, Harker, and Kashkari amid growing policy uncertainty.

    Gold price begins the week on a higher note, gaining over 2.56% and refreshing a previous record high as the precious metal hits $3,430 on uncertainty about comments that threat to curtail the Federal Reserve’s (Fed) independence. At the time of writing,  XAU/USD trades at $3,419 after hitting a daily low of $3,329.

    Demand for bullion has increased as United States (US) President Donald Trump continues to exert pressure on the Fed. Fed Chair Jerome Powell called him a “major loser” and said he is always too late to reduce borrowing costs.

    Last week, Powell said the US central bank is in wait-and-see mode and even flagged the chance of a stagflationary scenario, acknowledging, “We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension.”

    Growing tensions between Trump and Powell, along with controversial trade policies, weighed on the Greenback, which, according to the US Dollar Index (DXY), has fallen to three-year lows of 97.92.

    Data-wise, the US economic docket is absent, though it would gather traction mainly supported by Fed speakers. Vice-Chair Philip Jefferson, Philadelphia Fed Patrick Harker, and Minneapolis Neel Kashkari are all set to deliver remarks on Tuesday.

    Daily digest market movers: Gold price soars to record high amid high US yields

    • The US 10-year Treasury yield rises four basis points to 4.373% yet fails to cap Bullion prices.
    • US real yields followed suit, climbing three and a half bps to 2.14%, as shown by the US 10-year Treasury Inflation-Protected Securities yields
    • In rates markets, money market traders have priced in 94.5 basis points of Fed rate cuts by the end of 2025, with the first cut expected in July.
    • Data-wise, this week the US economic docket will be packed by a flurry of Fed speakers, S&P Global Flash PMIs, Durable Goods Orders and the University of Michigan Consumer Sentiment final reading.

    XAU/USD technical outlook: Gold price poised to challenge $3,450 in the near term

    The uptrend in Gold prices remains in play, even with the chance of testing the $3,500  level touted by Citi to be reached in the next three months. The Relative Strength Index (RSI) turned overbought, an indication that the precious metal could be set for a pullback, but a breach of the latest peak suggests that bulls could reach $3,450 in the near term.

    Conversely, if XAU/USD tumbles below $3,400, the first support would be the April 17 high of $3,357, followed by $3,300.

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.



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  • Gold price explores past ,400 as Trump-Powell clash sparks Fed independence fears

    Gold ends week higher despite Powell’s pushback, trade uncertainty lingers


    • Gold rallies $90 this week as the US Dollar weakens amid rising trade tensions and geopolitical risks.
    • Fed’s Daly says policy is still restrictive; neutral rate may be rising, echoing Powell’s hawkish tone.
    • Traders focus on key US data next week: Flash PMIs, Durable Goods, and final Consumer Sentiment.

    Gold prices are set to end the week on a positive note, up by over 2.79% as the precious metal enjoyed a $90 US Dollar (USD) rally due to the latter weakness sponsored by uncertainty about global trade. At the time of writing, XAU/USD trades at $3,326.

    XAU/USD holds at $3,326 after hitting ATH of $3,358; real yields rise but long weekend profit-taking caps rally

    European and US markets are closed due to a long Easter weekend, so news flows are light. San Francisco Federal Reserve (Fed) President Mary Daly crossed the wires and said that the economy is in a good place, though some sectors are slowing down. She added that policy remains restrictive in good place, exerting downward pressure on inflation, and added that neutral rates “may be rising.”

    Bullion prices dropped after hitting an all-time high (ATH) of $3,358 as traders booked profits due to the long weekend. Wednesday’s hawkish speech by Fed Chair Jerome Powell capped the precious metal advance, even though uncertainty over US trade policies and geopolitical risks may underpin Gold prices.

    Yields rose, with the US 10-year T-note yield rising five basis points to 4.333%. US real yields, which are calculated by the yield of the nominal note minus inflation expectations, climb five bps to 2.163%, a headwind for Gold prices.

    Next week, the US economic docket will be packed by a flurry of Fed speakers, S&P Global Flash PMIs, Durable Goods Orders and the University of Michigan Consumer Sentiment final reading.

    XAU/USD Price Forecast: Technical outlook

    Gold’s uptrend remains intact despite Thursday’s pullback below the $3,330 mark. As prices recover some earlier losses, the lack of downside follow-through suggests limited acceptance of lower levels, keeping the door open for further gains.

    Momentum-wise, the Relative Strength Index (RSI) remains overbought but not yet at the extreme 80 level. However, a mean-reversion move could be on the horizon with the RSI turning lower.

    In that case, initial support lies at $3,300, followed by the April 16 low at $3,229. On the upside, a break above $3,350 could set up a test of the year-to-date (YTD) high, with the next target at $3,400.

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.



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  • EUR/USD climbs as US Dollar weakens on trade tensions

    EUR/USD climbs as US Dollar weakens on trade tensions


    • Euro edges higher amid US Dollar pressure after the White House pushes tariffs on Chinese ships, fueling global trade risks.
    • Trump reportedly furious with Fed Chair Powell; adviser says President reviewing legality of dismissal.
    • ECB’s Muller says lower energy prices and tariffs justify rate cut, though warns fragmentation may fuel inflation ahead.

    The Euro (EUR) advances against the US Dollar (USD) in muted trading as financial markets are closed on Good Friday. At the time of writing, EUR/USD trades at 1.1385, up 0.21%, lacking the strength to break the elusive 1.14 mark.

    EUR/USD up 0.21% in holiday-thinned trading as markets digest US-China shipping levies and renewed Fed independence concerns

    The financial markets’ narrative remains focused on the United States’ (US) controversial trade policies, which drove prices to dump the Greenback in favor of other G8 FX peers, like the shared currency.

    Still, the White House is moving forward with applying levies on Chinese ships docking at US ports, which would threaten to shake up global shipping routes and escalate the trade war between China and the US.

    On Thursday, breaking news revealed that President Trump was angered at Federal Reserve (Fed) Chair Jerome Powell and considered ousting him. Although market participants did not react to the headline, recently, White House Senior Adviser Kevin Hassett insisted that “Trump is studying whether firing Fed’s Powell is an option.”

    In the meantime, the US Dollar Index (DXY), which tracks the buck’s performance against a basket of six other currencies, falls 0.09%, down to 99.31.

    With the news flow light, European Central Bank’s (ECB) Madis Müller revealed that the drop in energy prices and tariffs supported the rate cut. He added that police do not remain a constraint and that key indicators are moving in the right direction. He also pointed out that a more fragmented economy could push prices up.

    EUR/USD Price Forecast: Technical outlook

    EUR/USD trades near the current week’s peak near 1.1400, with price action showing the Euro is poised to extend its gains past that area, opening the door for further upside. Key resistance levels are at the April 11 high at 1.1473, followed by 1.1498, the February 2022 peak, ahead of the 1.1500 figure.

    Euro FAQs

    The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
    EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
    The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
    The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
    Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
    A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
    Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
    If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.



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  • Gold surges past ,400 on Israel-Iran war risk, soft US inflation boosts safe-haven demand

    Gold price eases below $3,330 after record high as Powell flags stagflation risk


    • Gold pulls back from $3,357 all-time high as Powell warns Fed’s goals may conflict, raising stagflation concerns.
    • Market mixed: Dow dips on UnitedHealth crash while other indices see modest gains.
    • Trump signals trade progress with EU and China; ECB cuts rates 25 bps, widening global policy divergence.

    Gold retreated on Thursday ahead of the Good Friday Easter holiday, losing 0.60%, after enjoying a rally of close to $400 gains during the last seven trading days on uncertainty about the United States’ (US) trade policies. /USD trades at $3,319 after hitting a record high of $3,357 earlier in the session.

    Market mood closed the last trading day of the week mixed, with two of the three main US indices posting gains, while the UnitedHealth Group plunge hit the Dow Jones. Wednesday’s speech by the Federal Reserve (Fed) Chair Jerome Powell continues to be digested by the markets.

    Fed Chair Powell turned hawkish, revealing that a weak economy and high inflation could conflict with the central bank’s two goals, making a stagflationary scenario possible.

    “We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” he said. “If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”

    Regarding trade talks, Trump said they’re doing well and added that he is very confident about a trade deal with the European Union (EU) and China.

    Data-wise, the European Central Bank (ECB) reduced rates by 25 basis points earlier and the US economic docket revealed the US labor market remains solid, but not so housing, after printing strong Building Permits figures, but weak Housing Starts.

    Daily digest market movers: Gold price falls as US yields rise

    • The US 10-year Treasury yield rises five basis points to 4.333%. US real yields followed suit, climbing five bps to 2.163%, as shown by the US 10-year Treasury Inflation-Protected Securities yields failing to cap Gold prices.
    • US Initial Jobless Claims for the week ending April 12 came in at 215K, down from 224K and below the 225K forecast—highlighting continued strength in the labor market.
    • Building Permits rose 1.6% to 1.482 million, exceeding the 1.45 million estimates. In contrast, Housing Starts dropped sharply from 1.494 million to 1.324 million, indicating softness in residential construction.
    • In rates markets, money market traders have priced in 86 basis points of Fed rate cuts by the end of 2025, with the first cut expected in July.

    XAU/USD technical outlook: Gold price retraces, but remains poised to test new record highs

    The uptrend in Gold prices remains despite retreating somewhat on Thursday, below the $3,330 figure. As the precious metals trim some of their earlier losses, price action indicates the lack of acceptance of lower prices, opening the door for further upside.

    From a momentum standpoint, the Relative Strength Index (RSI) is overbought but not near the 80 extreme level. Nevertheless, as the RSI aims lower, it suggests that a mean reversion move is on the cards. In the event of that outcome, XAU/USD’s first support would be the $3,300 figure. A breach of the latter will expose the April 16 daily low of $3,229.

    If bulls push prices past $3,350, they could test the year-to-date (YTD) peak, followed by $3,400.

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.



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  • Mexican Peso slips as USD/MXN reclaims 20 despite tariff exemption hopes

    Mexican Peso slips as USD/MXN reclaims 20 despite tariff exemption hopes


    • Mexican Peso pares gains late in session as traders digest Trump’s shifting tariff stance and looming US tomato duties.
    • Sheinbaum continues talks to avoid steep tariffs; US to impose 20.91% duty on Mexican tomatoes from July 14.
    • Traders eye Mexico’s inflation and retail data, while US Retail Sales and Jobless Claims remain i

    The Mexican Peso reversed its course and dropped against the US Dollar late in the North American session, with no catalyst behind the latter move as market participants digest Trump’s tariff rhetoric, which of late hinted at making exemptions on semiconductors and electronics. At the time of writing, the USD/MXN climbs back above the 20.00 figure and gains over 0.12%.

    Mexico’s President Claudia Sheinbaum continued negotiating with her US counterpart to avoid Trump’s higher tariffs. At the same time, the US Commerce Department announced that tomatoes imported from Mexico to the US would be subject to 20.91% tariffs from July 14.

    Meanwhile, Reuters revealed that a report suggested Japan’s Honda is considering relocating some car production to the US to avoid tariffs.

    Across the border, the economic docket revealed that US import prices fell in March due to decreasing energy prices, as the US Labor Department showed on Tuesday.  According to analysts quoted by Reuters, the effects of tariffs have not been felt.

    Ahead in the docket, Mexico will feature Retail Sales, mid-month inflation for April, and Economic Activity for February. In the US, Retail Sales would also be featured on Wednesday, followed by housing and Initial Jobless Claims data.

    Daily digest market movers: Mexican Peso hurt by tariffs, retreats

    Mexico’s Retail Sales in January were 0.6% MoM and 2.7% YoY. If Wednesday’s data falls below those figures, it would be another signal that the economy is slowing down, as Banco de Mexico (Banxico) Governor Victoria Rodriguez Ceja mentioned.

    Before the Senate, Victoria Rodriguez Ceja said the Governing Board is still unsatisfied with the inflation rate, which stood at 3.8% YoY in March, though far from the 3% target. She added that the disinflation process and the economic slowdown justify Banxico’s dovish approach and hinted that the central bank might continue easing policy.

    This would keep the USD/MXN underpinned as the interest rate differential between Mexico and the United States will reduce. For the upcoming meetings, Banxico is expected to lower rates by 50 basis points (bps) while the Federal Reserve (Fed) hinted they will keep rates unchanged.

    Money market players had priced in 85 bps of easing toward the end of 2025. The first cut is expected in July.

    US Retail Sales in March are expected to rise 1.3% Month over Month, up from 0.2% in February. Meanwhile, Industrial Production is projected to contract by 0.2% Month over Month, down from 0.7% expansion for the same period.

    USD/MXN technical outlook: Mexican Peso depreciates as USD/MXN surpasses 20.00

    The USD/MXN uptrend stays alive, yet the exotic pair fell briefly below 20.00, near the 200-day Simple Moving Average (SMA) at 19.86. However, it seems poised to close the day above 20.00, paving the way for buyers to push prices higher.

    If buyers drive the exotic pair past April 14’s high of 20.29, the next resistance would be the confluence of the 50-day and 100-day Simple Moving Averages (SMAs) near 20.30 /36, followed by the 20.50 figure. Once hurdle, the next stop would be the April 9 daily peak of 21.07. Conversely, if USD/MXN tumbles below 20.00, look for a test of the 200-day SMA at 19.86.

    Mexican Peso FAQs

    The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.

    The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.

    Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.

    As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.



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  • Mexican Peso firms as US Dollar softens and Treasury yields climb

    Mexican Peso collapses on tariffs turmoil and US Dollar strength


    • Mexican Peso depreciates over 1% as Trump threatens more China tariffs; risk-off sentiment crushes EM currencies.
    • Peso slumps for second straight day as VIX hits pandemic-era highs, fueling flight to safety into USD.
    • Sheinbaum avoids retaliatory tariffs as Mexico pushes for dialogue; auto sector fears long-term disruption.

    The Mexican Peso (MXN) plunges against the US Dollar (USD), extending its losses for the second consecutive day as risk appetite deteriorates, with traders moving into the safe-haven status of the Greenback. Hopes that Washington would reconsider the tariff decision over the weekend were cut short. At the time of writing, the USD/MXN exchange rate is 20.68, representing an increase of more than 1%.

    The financial markets are under stress as volatility measures reach levels last seen since the Covid crisis in March 2020, as depicted by the Volatility Index (VIX) futures. Hence, Emerging Market (EM) currencies remain pressured with the Peso trading near five-week lows.

    Recently, US President Donald Trump threatened China that if they don’t retract from imposing new 34% duties on US exports to its country, the US will add 50% tariffs on Chinese products effective April 9.

    Recently, the Mexican President, Claudia Sheinbaum, said that she would like to avoid imposing reciprocal tariffs on the US, adding that the Economy Minister Marcelo Ebrard would continue negotiations with US officials.

    Mexican Auto Exports and Production improved in March compared to February’s figures. However, tariffs imposed on automobiles could weigh on future numbers, as some companies have expressed that they will relocate to the United States (US) and even reduce work hours in Mexico’s factories.

    Ahead in the calendar, Mexico’s docket will feature inflation figures and the release of Banco de Mexico’s (Banxico) latest meeting minutes. In the US, inflation data and the Federal Reserve’s (Fed) minutes will be announced.

    Daily digest market movers: Mexican Peso ignores decent economic figures and drops

    • Mexico’s Auto Exports rose by 3.8% YoY up from -9.2% contraction. Auto Production increased by 12.1% on an annual basis, exceeding the -0.8% contraction in February.
    • Mexico’s Consumer Confidence deteriorated further in March, showing the economy continues to slow down.
    • Fed Governor Adriana Kugler said that tariffs and shortages are important to consider when forecasting inflation. She added that new tariffs will be “consequential” and have already begun to see some price increases.
    • Banxico’s Governor, Victoria Rodríguez Ceja, stated that the central bank will remain attentive to US trade policies and their impact on the country, with a primary focus on inflation, as she noted in an interview with El Financiero.

    USD/MXN technical outlook: Mexican Peso treads water as USD/MXN climbs above 20.50

    The USD/MXN uptrend continues with buyers clearing the confluence of the 50 and 100-day Simple Moving Averages (SMAs) near 20.34/36, which has exacerbated a rally to a multi-week high of 20.80. Nevertheless, buyers are reluctant to push prices higher, and the pair remains above 20.50.

    If USD/MXN clears 20.80, the next resistance would be the March 4 peak at 20.99. A breach of the latter will expose 21.00, followed by the February 3 high of 21.28. Conversely, the first support is the confluence of the 50 and 100-day Simple Moving Averages (SMAs) around 20.34/36, followed by the 20.00 mark. A breach of the latter will expose the 200-day SMA at 19.76.

    Banxico FAQs

    The Bank of Mexico, also known as Banxico, is the country’s central bank. Its mission is to preserve the value of Mexico’s currency, the Mexican Peso (MXN), and to set the monetary policy. To this end, its main objective is to maintain low and stable inflation within target levels – at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%.

    The main tool of the Banxico to guide monetary policy is by setting interest rates. When inflation is above target, the bank will attempt to tame it by raising rates, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN. The rate differential with the USD, or how the Banxico is expected to set interest rates compared with the US Federal Reserve (Fed), is a key factor.

    Banxico meets eight times a year, and its monetary policy is greatly influenced by decisions of the US Federal Reserve (Fed). Therefore, the central bank’s decision-making committee usually gathers a week after the Fed. In doing so, Banxico reacts and sometimes anticipates monetary policy measures set by the Federal Reserve. For example, after the Covid-19 pandemic, before the Fed raised rates, Banxico did it first in an attempt to diminish the chances of a substantial depreciation of the Mexican Peso (MXN) and to prevent capital outflows that could destabilize the country.



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  • GBP/USD climbs past 1.2950 as traders brace for Trump’s tariff announcement

    GBP/USD climbs past 1.2950 as traders brace for Trump’s tariff announcement


    • Trump to announce new tariffs at 20:00 GMT; plan may include 20% duties on nearly all US trade partners.
    • UK hopes for exemption amid balanced trade ties; GBP rallies on optimism and cautious risk-on mood.
    • Strong ADP and Durable Goods data fail to lift USD ahead of key NFP and Powell speech later this week.

    The Pound Sterling (GBP) advances early during the North American session against the US Dollar (USD) as traders await United States (US) President Donald Trump’s tariff announcement, which could potentially spur a global economic slowdown. At the time of writing, GBP/USD trades at 1.2950, up 0.22%.

    Sterling gains 0.22% despite strong US data as market focus shifts to potential 20% reciprocal tariffs on global trade

    At 20:00 GMT, Donald Trump is expected to announce the imposition of reciprocal tariffs on trading partners in the White House Rose Garden. Although the percentage of duties applied to US trade partners is unknown, The Washington Post mentioned that Trump’s aides were considering a plan of approximately 20% from nearly every country.

    This could potentially derail the United Kingdom (UK) economy, but the British remain hopeful that the imposed duties could be revised as the UK has a more balanced trading relationship with the United States.

    Data-wise, strong US job figures, revealed earlier, failed to boost the Greenback. The ADP National Employment Change in March showed that companies added 155K to the workforce, more than the 105K forecast and up from 84K jobs created in February.

    Other data showed that Durable Goods Orders in February exceeded estimates of 0.9% and expanded 1% MoM.

    This week’s highlights include Trump’s announcement, followed by Thursday’s Initial Jobless Claims and the ISM Services PMI. On Friday, traders will be eyeing the Nonfarm Payrolls figures and Federal Reserve Chair Jerome Powell’s speech.

    GBP/USD Price Forecast: Technical outlook

    GBP/USD climbs to a fresh two-day high, an indication that buyers are stepping in, with them eyeing the next key resistance seen at the March 27 peak of 1.2991. If cleared, 1.3000 is up next, followed by the current year-to-date (YTD) high of 1.3014, before eyeing last year’s November high of 1.3047.

    Conversely, a drop below 1.2900 could send GBP/USD falling to fresh four-day lows beneath 1.2878, with sellers eyeing a test of the 200-day Simple Moving Average (SMA) at 1.2806.

    British Pound PRICE This week

    The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Swiss Franc.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   -0.23% -0.22% 0.17% 0.02% -0.20% -0.34% 0.32%
    EUR 0.23%   0.11% 0.46% 0.29% 0.11% -0.08% 0.60%
    GBP 0.22% -0.11%   0.33% 0.22% -0.00% -0.16% 0.53%
    JPY -0.17% -0.46% -0.33%   -0.17% -0.35% -0.49% 0.05%
    CAD -0.02% -0.29% -0.22% 0.17%   -0.19% -0.36% 0.30%
    AUD 0.20% -0.11% 0.00% 0.35% 0.19%   -0.16% 0.49%
    NZD 0.34% 0.08% 0.16% 0.49% 0.36% 0.16%   0.66%
    CHF -0.32% -0.60% -0.53% -0.05% -0.30% -0.49% -0.66%  

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

     



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  • Gold price hits record high past ,100 on trade turmoil, risk aversion

    Gold price hits record high past $3,100 on trade turmoil, risk aversion


    • Gold hits fresh all-time high amid speculation Trump’s April 2 tariffs could target all trade partners.
    • Goldman ups US recession odds to 35% as sentiment deteriorates and Washington signals tolerance for slowdown.
    • DXY and yields rise but fail to dent Gold’s rally as safe-haven flows dominate ahead of key US data.

    Gold prints another record high on Monday, surpassing the $3,100 threshold for the first time and extends its gains to an all-time high of $3,127 before retreating somewhat. Uncertainty surrounding US trade policies and the April 2 Liberation Day is lingering, with investors shifting risk-averse and flocking to the yellow metal’s safe-haven appeal. At the time of writing, XAU/USD trades at $3,119, up more than 1%.

    Risk appetite deteriorates as traders await the announcement of additional tariffs on Wednesday. Goldman Sachs revealed that the odds of a recession in the United States (US) rose from 20% to 35%, primarily due to business and household pessimism about the outlook, as well as Washington’s tolerance of a deeper economic slowdown.

    Trump’s comments on Sunday on Air Force One increased the chances that tariffs could be universal, instead of the 10 or 15 revealed by US Treasury Secretary Scott Bessent. “Who told you 10 or 15? You might have heard it, but you didn’t hear it from me,” the President said. “You’d start with all countries. So let’s see what happens.”

    Therefore, Bullion prices exploded, even though US Treasury bond yields had recovered some ground, particularly the coupon of the 10-year T-note. The US Dollar Index (DXY), which tracks the value of the buck against a basket of six currencies, climbs 0.24% to 104.25.

    On the data front, the Chicago PMI improved, despite remaining in contractionary territory for the sixteenth straight month. Ahead this week, the US economic docket will feature the ISM Manufacturing and Services PMI, as well as Nonfarm Payrolls figures.

    Daily digest market movers: Gold prices rises amid firm US Treasury yields

    • The US 10-year T-note yield is flat at 4.257%. US real yields edge down two bps to 1.86%, according to US 10-year Treasury Inflation-Protected Securities (TIPS) yields.
    • The Chicago PMI data for March rose by 47.6 points from 45.5 and exceeded forecasts of 45.2. Notably, it is the largest level since November 2023, yet it remains in contractionary territory for the sixteenth consecutive month.
    • Some of the subcomponents improved, like Production, New Orders, Employment, and Order Backlogs. Supplier Deliveries, Inventories and Prices Paid dipped, according to the poll.
    • Last week’s US inflation data held steady, according to the US Bureau of Economic Analysis. Nevertheless, the risks of a recession drove market participants to price in over 74 basis points of easing toward the end of 2025, according to data from the Chicago Board of Trade.
    • In the geopolitics space, US President Donald Trump threatened to impose secondary tariffs of 25%-50% on buyers of Russian oil, if Moscow blocks his efforts to end the war in Ukraine.
    • Wall Street’s banks had updated their Gold forecasts last week. Economists at Goldman Sachs, Société Générale, and Bank of America identified $3,300 as the next target, according to a Kitco article.

    XAU/USD technical outlook: Gold price rallies past $3,050, eyes on $3,100

    Gold’s rally expands. The yellow metal is up 18.96% so far this year, and due to uncertainty in the financial markets, the uptrend could continue. Although the Relative Strength Index (RSI) is overbought, traders should be aware that, due to the aggressiveness of the move, the most extreme level is 80.

    The XAU/USD’s next resistance would be the psychological $3,150 and $3,200 on the upside. On the other hand, Bullion’s first support would be $3,100. A breach of the latter will expose the March 20 high turned support at $3,057, followed by the $3,000 figure.

    Tariffs FAQs

    Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

    Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

    There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

    During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

     



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