Gold prices rose in European trade on Thursday towards recent record highs with higher haven demand amid surging global trade tensions after Donald Trump imposed aggressive tariffs on imported cars.

Now markets await important US data and remarks by Fed officials to gather more clues on the future path of Fed interest rates.

The Price

Gold prices rose 0.65% today to $3038 an ounce, with a session-low at $3017.

On Wednesday, gold was little changed, while rising 0.5% on Tuesday and approaching record highs at $3057.

Trump’s Tariffs

US President Trump announced aggressive 25% tariffs on all cars not made in the US, to be implemented on April 2nd.

The tariffs will also include all foreign sourced parts, which represents a huge hit to the US car industry.

Trump’s move shook market confidence once more and could lead vehicle prices to rise by $10,000 on average according to some analysts.

US Rates

Minneapolis Fed President Neil Kashkari said even as the Fed achieved a log of progress in containing inflation, there’s still more work to do to bring inflation to the 2% target.

According to  the Fedwatch tool, the odds of a May 0.25% Fed rate cut stood at 12%.

The odds of a similar cut in June stood at a much higher 65%.

SPDR

Gold holdings at the SPDR Gold Trust remained unchanged yesterday at 929.36 tons.

The euro rose in European trade against major rivals, holding above three-week lows against the dollar and on track for the first profit in seven sessions. 

It comes as traders assess the mounting trade risks after Trump’s new 25% tariffs on imported vehicles and auto parts.

The European Central Bank is on track to hold interest rates unchanged in April, with traders waiting for more eurozone data to gather more clues.

The Price

The EUR/USD price rose 0.3% today to $1.0787, with March 5 lows at $1.0732.

The euro closed down 0.35% on Wednesday against the dollar, the sixth loss in a row amid growing concerns about a weakness in the eurozone services sector in the first half of the year.

Trump’s Tariffs

US President Trump announced aggressive 25% tariffs on all cars not made in the US, to be implemented on April 2nd.

The tariffs will also include all foreign sourced parts, which represents a huge hit to the US car industry.

Trump’s move shook market confidence once more and could lead vehicle prices to rise by $10,000 on average according to some analysts.

European Rates

Reuters reported the European Central Bank policymakers see an increasing probability of a hiatus in the cycle of interest rate cuts at the next meeting, before resuming later on. 

Traders reduced the odds of an ECB April rate cut to less than 50%.

The yen rose in European trade on Thursday against a basket of currencies, while trying to recover from three-week lows against the dollar on strong haven demand amid mounting global trade tensions. 

Recovery attempts are stymied by slower inflationary pressures on Bank of Japan policymakers, which hurt the odds of a Japanese rate hike in May.

The Price

The USD/JPY fell 0.3% today to 150.08, with a session-high at 150.62.

The yen lost 0.45% on Wednesday against the dollar, resuming losses and approaching three-week lows at 150.93 as Japanese services prices slowed down.

Global Trade Worries

US President Trump announced aggressive 25% tariffs on all cars not made in the US, to be implemented on April 2nd.

The tariffs will also include all foreign sourced parts, which represents a huge hit to the US car industry.

Trump’s move shook market confidence once more and could lead vehicle prices to rise by $10,000 on average according to some analysts.

Japanese Rates

Recent data showed Japanese services prices rose 3.0% in February, down from 3.2% in January, and below estimates of 3.1%.

Following the data, the odds of a Bank of Japan 0.25% rate hike in May fell to 40%, with investors now waiting for more inflation, unemployment, and wages data from Japan to gather more clues.

A Reuters survey showed analysts expect the next interest rate hike by the BOJ to occur in the third quarter, likely in July.

Bank of Japan Governor Kazuo Ueda said ahead of the Diet that the BOJ should hike interest  rates if food prices continue to rise and lead to wide-spread national inflation.

He said that recent “very high inflation” in Japan is likely prompted by transient factors, such as higher import and good costs, which will likely dissipate and shouldn’t impact monetary policies.

Most cryptocurrencies lost ground on Wednesday as the risk appetite took a hit with traders assessing latest statements by Fed officials, and the developments of the trade war.

Chicago Fed President Austin Goolsbey expects a slight dip in interest rates in the upcoming 12-18 months, with the next step taking longer than expected due to uncertainty. 

Atlanta Fed President Raphael Bostic also expects only a single interest rate cut in 2025, down from two cuts in previous forecasts.

Investors are still concerned about the impact of US President Donald Trump’s tariff policies on economic growth and inflation.

Ethereum

Ethereum fell 3.7% on Coinmarketcap as of 19:41 GMT to $1997.7.

Ripple

Ripple fell 3.2% on Coinmarketcap as of 19:41 GMT to $2.37.