Federal Reserve Chairman Jerome Powell’s testimony before the US Congress added volatility to the market during trading on Tuesday. Additionally, European Commission President Ursula von der Leyen signaled that the European Union plans to retaliate against the tariffs on steel and aluminum imposed by the United States. As is well-known, Germany is a major steel exporter to the United States and is significantly affected by this situation.
This sentiment will likely continue to influence market movements on Wednesday (12/2/2025).
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GOLD
The price of Gold (XAUUSD) dropped over US$ 10 or 100 pips to US$ 2,897.09 per troy ounce after previously hitting an all-time high of US$ 2,942.61 per troy ounce.
This decline occurred due to a profit-taking action, considering that Gold has been on a considerable rally since the beginning of the year. Comparing the closing price from 2024 to yesterday’s peak, Gold has surged over US$ 318 or 3,180 pips.
Such a steep increase in Gold creates the potential for further profit-taking in today’s European trading session, especially with the upcoming release of the Consumer Price Index (CPI) for the United States tonight. This data could trigger significant movements in the financial markets.
OIL
Oil prices (CLS10) have risen for two consecutive days after closing at US$ 73.17 per barrel on Tuesday. This marks an increase of US$ 0.71 compared to Monday’s closing price.
The rise in Oil is fueled by concerns over possible future supply disruptions. Potential sanctions on Iran and Russia could lead to a decrease in their oil exports.
This sentiment will continue to affect Oil’s movements during today’s European trading session.
EURUSD
EURUSD climbed 548 points (54.8 pips) to 1.03601 in Tuesday’s trading, reacting to Fed Powell’s statements indicating a more patient approach to interest rate cuts.
This stance aligns with market expectations, as there are no signals that the Fed is increasingly worried about rising inflation as a result of Trump’s import tariff policies, which might require them to maintain interest rates longer. This scenario exerts downward pressure on the US dollar, thus providing positive sentiment for EURUSD, which is expected to persist in the European trading session.
GBPUSD
GBPUSD increased by 783 points (78.3 pips) to 1.24439 during Tuesday’s trading. Similar to EURUSD, this currency pair was also boosted by Powell’s remarks about maintaining the interest rate from last month.
The market feels somewhat relieved, noting the possibility that high interest rates may be sustained longer if inflation in the United States accelerates again.
USDJPY
USDJPY rose 470 points (47 pips) in Tuesday’s trading and surged by 1.277 points (127.7 pips) to reach 153.735 by this afternoon.
This significant increase in USDJPY follows Bank of Japan (BoJ) Governor Kazuo Ueda’s testimony, which did not provide a clear timeline for future interest rate hikes. The wide interest rate differential between the Fed and the BoJ seems likely to persist for an extended period.
This situation creates positive sentiment for USDJPY, which will continue to be felt in the European trading session.
NASDAQ
The Nasdaq index dipped slightly by 45 points to 21,791 during Tuesday’s trading. The range of movement in the Nasdaq is also not as significant as earlier in the week.
This indicates that market participants are awaiting more certainty, particularly regarding the potential escalation of the trade war. Especially since the European Union has plans to respond to the US’s steel and aluminum tariff increases. Such sentiment could apply downward pressure on the Nasdaq during the European trading session.
