Gold rises above $3200 an ounce for first time ever
Gold prices rose in European trade on Monday and expanded the gains for the third straight session, trading above $3200 an ounce for the first time ever and heading for the biggest weekly profit this year on haven demand as the US-China trade war erupts.
The huge gains are boosted by the dollar's tumble against major rivals, due to concerns about a potential US recession this year.
The Price
Gold prices rose 1.4% today to $3220 an ounce, a record high, with a session-low at $3175.
On Thursday, gold rose 3.1%, the second profit in a row, marking a fresh record high.
Weekly Trades
Gold prices are up 6% so far this week on track for the biggest weekly profit in 2025.
The Trade War
US President Donald Trump escalated the devastating trade war with China by announcing 145% tariffs on Chinese products.
The tariffs will be immediate and are a response to China's disrespect to global markets as Trump described it.
Simultaneously, Trump announced a 90-day hold on tariffs for most other countries .
The Chinese government announced fresh retaliatory 84% tariffs on US products, deepening the trade war.
Investors are still concerned about the trade escalation between the US and China in particular, and from any potential recession due to the trade war, in turn impacting demand.
US Dollar
The dollar index tumbled 1.2% on Friday on track for the second loss in a row, plumbing a 21-month trough at 99.71 against a basket of major rivals.
A weaker dollar makes the greenback-denominated futures cheaper to holders of other currencies.
The huge losses come as investors lose confidence in US assets and flee the American stock and bond markets towards safe havens such as the Swiss franc and gold.
Fed Minutes
The latest Federal Reserve’s meeting minutes showed that members are all concerned about inflation and lower growth risks due to the tariff war.
Chicago Fed President Austin Goolsbey said on Monday that while corporations are concerned about tariffs, the Fed needs to look at actual data before responding.
Recent data showed US consumer prices slowed down more than expected in March, reducing inflationary pressures on the Federal Reserve.
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in May rose from 15% to 35%, while the odds of a June rate cut rallied to 91%.
SPDR
Gold holdings at the SPDR Gold Trust rose 12.62 tons yesterday, the biggest increase since March 21 highs, to a total of 949.71 tons, the highest since September 2022.
Euro hits three-year high as US, EU pause tariffs
The euro rose in European trade on Friday on track for the second profit in a row against the US dollar, hitting a three-year high and on track for the third weekly profit in a row.
It comes after the EU suspended retaliatory tariffs on US products for 90 days after a similar decision by President Donald Trump.
The Price
The EUR/USD price rose 1.65% today to $1.1384, the highest since February 2022, with a session-low at $1.1187.
The euro rallied 2.3% on Thursday, marking the biggest profit since December 3, 2015 as the US-EU trade war takes a breather.
Weekly Trades
Euro is on track for an excellent 3.85% profit against the dollar this week, which would mark the third weekly profit in a row.
Retaliatory Tariff Pause
The European Commission paused the first stage of retaliatory tariffs on US products for 90 days after a similar decision by President Donald Trump, in a step aimed at opening the door for conversation.
European Commission President Ursula von der Leyen said the EU wants to give negotiations a real chance but maintained their capability of activating counter measures if talks failed to produce results.
Der Leyen said the EU offered the US “zero for zero” tariff deal to avoid a trade war.
European Economy Stimulus
According to sources, the EU is working on a package of emergency measures to boost parts of the economy that were particularly hit by the threat of US tariffs.
Swiss franc surges to 14-year peak as investors flee US assets
The Swiss franc rose in Asian trade on Friday on track for the second straight profit against the dollar, hitting 14-year highs and on track for the biggest weekly profit since 2022.
It comes amid surging haven demand on the franc with investors losing confidence in US assets due to President Donald Trump’s aggressive trade policies.
The Price
The USD/CHF price fell 1.2% today to 0.8140, a January 2011 low, with a session-high at 0.8240.
The franc surged 3.8% on the dollar on Thursday, the second profit in three days, and the largest since June 2015.
Weekly Trades
The franc is up a stunning 5.3% against the dollar so far this week on track for the fourth weekly profit in a row, and the largest such profit since November 2022.
US Assets
Confidence in US assets is plummeting, prompting investors to flee the US markets, especially stocks and bonds, towards other safe havens such as the Swiss franc and gold.
It comes amid mounting uncertainty in the global markets with growing trade tensions with China, and concerns about a global recession due to Trump’s aggressive tariffs.
The Best Safe Haven
The Swiss franc has emerged as a strong safe haven in the forex market, supported by the lowest interest rates among G8 currencies, reinforcing its appeal in times of economic crisis.
Swiss Rates
As the odds of higher global inflation and recession grow, it’s likely the Swiss National Bank will steer clear of any rate cuts in the first half of the year.
Yen expands gains to seven-month high on trade war concerns
The Japanese yen rose in Asian trade on Friday on track for the second straight profit against the dollar, hitting seven-month highs and about to mark the second weekly profit in a row.
It comes amid surging haven demand due to mounting concerns about the US-China trade war, which could tank the global economy and international trade.
The Price
The USD/JPY pair fell 1.1% today to 142.87 yen per dollar, the lowest since September 2024, with a session-high at 144.60.
The yen rose 2.2% on Thursday against the dollar, the largest such profit since January 2023 as the US-China trade war erupted.
Weekly Trades
The yen is up 2.75% so far against the dollar, on track for the second weekly profit in a row.
Trade War
US President Donald Trump escalated the devastating trade war with China by announcing 145% tariffs on Chinese products.
The tariffs will be immediate and are a response to China's disrespect to global markets as Trump described it.
Simultaneously, Trump announced a 90-day hold on tariffs for most other countries .
The Chinese government announced fresh retaliatory 84% tariffs on US products, deepening the trade war.
Investors are still concerned about the trade escalation between the US and China in particular, and from any potential recession due to the trade war, in turn impacting demand.
Japanese Rates
As the risks facing the Japanese economy grew, especially from aggressive US tariffs, the odds of a Bank of Japan rate hike later this year fell to zero.
US Rates
Recent data showed US consumer prices slowed down more than expected in March, reducing inflationary pressures on the Federal Reserve.
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in May rose from 15% to 35%, while the odds of a June rate cut rallied to 91%.
Interest Rate Gap
The current US-Japan interest rate gap is standing at 400 basis points in favor of the US, and will likely shrink to 375 basis points in the first half of the year, underpinning the yen against the greenback.