The value of Gold continues to assert its strength as a safe-haven asset amid rising global uncertainty. During the European session on Tuesday, Gold remained in high demand and traded close to its all-time high, fueled by concerns over the escalating trade war between the U.S. and China and the prospect of monetary policy easing by the Federal Reserve. Market participants are awaiting the market’s reaction to the U.S. Empire State Index data scheduled for tonight.
Here’s the latest data from Trading Central:
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- U.S. Empire State Index; forecast -18 vs previous -20
GOLD
The price of Gold (XAU/USD) gained around $3,230 during the European session on Tuesday, nearing its record high. Fears regarding the escalating U.S.-China trade conflict and expectations for a Fed rate cut next year continue to drive demand for safe-haven assets, while the weakening of the U.S. Dollar also supports prices. However, President Trump’s suspension of tariffs has limited further buying activity.
Tonight, market focus is on the release of the NY Empire State Manufacturing Index for April, which is expected to rise slightly to -18 from -20. If the data comes in weaker than anticipated, it could bolster the prospects for easing by the Fed and open up further upside potential for Gold in the U.S. session tonight.
OIL
Oil prices dipped during the European session to $60.94 following an IEA report that cut the global demand growth projection for 2025 from 1.03 million to 730 thousand barrels per day. For 2026, demand is forecasted to increase by only 690 thousand barrels daily. On the other hand, global supply increased by 910 thousand barrels per day in March, driven primarily by Non-OECD production, especially from the U.S.
The market has reacted negatively to this imbalance. The IEA predicts that supply will continue to grow, surpassing demand through 2026. Additional pressure stems from March production data from OPEC, which decreased by 150 thousand barrels per day, but this reduction is insufficient to offset the surge in global supply. Without new catalysts to support demand, Oil prices are at risk of continuing their downward trend with short-term targets.
EURUSD
EURUSD traded sideways around 1.1350 during the European session after a sharp increase in recent days. This consolidation occurs alongside a temporary strengthening of the U.S. Dollar, which found support after more than a week of pressure. However, investors anticipate further weakness in the U.S. Dollar due to its diminishing status as a safe haven, influenced by President Donald Trump’s ever-changing tariff policies. Additionally, concerns about a slowing U.S. economy continue to weigh on the Dollar, reflected in the spike in 10-year U.S. Treasury yields, which have risen over 13% in the last six sessions.
Market sentiment is also affected by economic data from Germany and the Eurozone. The German ZEW Economic Sentiment Index significantly dropped to -14 in April, well below market expectations, while the Eurozone Economic Sentiment Index also fell sharply to -18.5. Although the Current Situation Index in Germany shows some improvement, the data still reflects a more considerable decline than expected, signaling concerns over the region’s economic outlook. With the U.S. Dollar under pressure and negative sentiment regarding the global economy, EURUSD may continue its consolidation until tonight.
GBPUSD
The British Pound (GBP) strengthened against other major currencies following the release of the U.K. labor market data for the three months ending in February. The Office for National Statistics (ONS) reported an addition of 206 thousand jobs, far exceeding the 144 thousand reported in January, providing a positive boost for GBP.
However, despite the employment data showing improvement, the unemployment rate remained steady at 4.4%. Market participants are concerned that employers may slow down hiring as increased contributions to the social security scheme take effect beginning in April. GBP is likely to continue its upward trend if positive economic data persists, but it could face corrections if worries about the impact of the new policies strengthen.
USDJPY
USDJPY rose due to a weakening Japanese Yen (JPY) during the European session on Tuesday, influenced by President Trump’s suspension of tariffs on consumer electronics and indications that the automotive industry may be exempt from the 25% tariffs. Emerging market optimism has diminished the JPY’s appeal as a safe-haven asset. Nevertheless, several factors such as concerns over the U.S.-China trade conflict and potential trade deals between Japan and the U.S. might limit further declines in the JPY.
In addition, expectations that the Bank of Japan (BoJ) will continue its rate hike, contrasting with the Fed’s easing policy, puts pressure on the U.S. Dollar and provides an edge to the lower-yielding JPY. Despite the Yen weakening, the uncertain market conditions and differing monetary policies continue to maintain cautious price movements.
NASDAQ
The Nasdaq succeeded in gaining during the European session, buoyed by positive sentiment from the U.S. Customs guidance excluding electronic products such as smartphones, computers, and semiconductors from reciprocal tariffs. This policy provides direct support for major tech stocks integral to the Nasdaq, pushing the index up by 0.6% during Monday’s trading session.
Nonetheless, comments from President Trump and Commerce Secretary Howard Lutnick suggesting that these exemptions may be temporary serve as a factor limiting any further rally.
