The price of Gold has reached an all-time high, driven by an increase in demand for safe-haven assets amid global economic uncertainty. The announcement of a 25% tariff on imported vehicles by U.S. President Donald Trump has sparked fears of an economic slowdown, prompting investors to shift their focus towards Gold. Speculation around the Federal Reserve potentially cutting interest rates has intensified, weakening the U.S. dollar and providing an additional boost for this precious metal.
Here are the insights from Trading Central:
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GOLD
Gold continues to perform remarkably well as the Asian session opens, hitting a record high of approximately $3,077. This surge has been fueled by rising demand for safe-haven assets in light of global uncertainties, particularly following President Trump’s announcement of a 25% tariff on imported vehicles. This policy has raised concerns about a global economic slowdown and potential retaliatory tariffs from U.S. trade partners. In this environment, investors are flocking to hedge assets, which further strengthens Gold’s unstoppable rally.
Moreover, the escalation of the trade war has heighted speculation that the Federal Reserve may soon cut interest rates to mitigate negative impacts on the U.S. economy. The weakening of the U.S. dollar due to these speculations significantly enhances Gold’s appeal as a non-yielding asset. However, this Gold rally now faces challenges as the market begins to show signs of overbought conditions. Investors are now keenly watching the Personal Consumption Expenditures (PCE) Index data from the U.S., set to be released today, which could provide clearer insights into the Fed’s monetary policy direction and subsequent movement of Gold prices.
OIL
Oil prices are trading around $69.80 at the beginning of the Asian session on Friday, reaching a one-month high. This increase is driven by a secondary tariff policy of 25% imposed by President Trump on countries purchasing oil and gas from Venezuela, effective from April 2. With the U.S. projected to be a major importer of Venezuelan oil, valued at $5.6 billion in 2024, this policy tightens the global energy market and raises concerns about supply disruptions.
Additionally, the decline in U.S. crude oil inventories provides extra support for Oil prices. The Energy Information Administration (EIA) reported that U.S. crude stocks fell by 3.341 million barrels for the week ending March 21, surpassing the expected decline of 1.6 million barrels. With this combination of geopolitical and fundamental factors, Oil is poised for continued gains in the European session, particularly if risk sentiments remain high and the U.S. dollar continues to weaken, making this commodity more attractive to global investors.
EURUSD
EURUSD has managed to maintain its upward trend since Thursday’s trading session, although this currency pair struggles to sustain positive momentum in the early hours of Friday in Asia. After encountering six consecutive days of selling pressure that caused a 2% decline from its peak, EURUSD finally rose by 0.4% on Thursday. This increase has come amid a de-escalation of trade tariff tensions after President Trump did not make any new statements regarding trade tariffs, providing some breathing room for investors.
On the other hand, U.S. economic data indicates that the Gross Domestic Product (GDP) for the fourth quarter of 2024 grew by 2.4%, slightly above the expected 2.3%. However, threats to U.S. fiscal stability remain concerning after Moody’s warned that higher tariffs and tax cuts could exacerbate the government deficit, potentially lowering U.S. debt ratings. Should this occur, U.S. government bond yields could rise, which may ultimately impact the U.S. dollar’s movement, providing additional impetus for EURUSD.
GBPUSD
GBPUSD is showing stability in the Asian session this morning, Friday (March 28, 2025), after gaining half a percent during Thursday’s trading and trading back above the 1.2900 level. While the 1.3000 threshold remains difficult to breach, the Pound manages to hold its ground amidst global uncertainties. Trade tensions between the UK and the U.S. continue to exert influence on this currency pair’s movements, with potential selling pressures persisting should tensions escalate.
UK Prime Minister Keir Starmer has warned that new U.S. tariffs could “cripple” the UK economy, while U.S. trading partners have become increasingly vocal in protesting Trump’s trade policies. Given these tensions, GBPUSD might undergo consolidation below the 1.3000 level. In the European afternoon session, this currency pair could potentially return above the 1.2950 level; any further developments regarding tariff policies could lead to greater volatility.
USDJPY
The USDJPY currency pair is witnessing profit-taking actions during the early Asian session after marking a new three-week high approaching 151.00 during the North American trading session on Thursday. The strengthening of the USDJPY is attributed to the weakened Japanese Yen (JPY), which remains under pressure despite market confidence that the Bank of Japan (BoJ) will continue its hawkish policy and potentially raise interest rates further in the near term.
The outlook for BoJ policy is increasingly driven by expectations of higher wage increases in Japan, as the country’s largest labor union, Rengo, announced a 5.4% salary increase this year. Despite the occurrence of profit-taking, USDJPY could potentially re-test the 151.00 level during the European afternoon session, depending on developments in U.S. economic data and BoJ policies that could influence market sentiment.
NASDAQ
The Nasdaq is experiencing selling pressure in the morning session in Asia, with potential declines continuing to dominate the market due to investor concerns over the impact of new tariffs announced by President Trump. The 25% tariff on imported vehicles intensifies economic uncertainty, worsening market sentiment, and triggering anxiety among market participants.
Investors are now awaiting the release of key inflation data as well as further developments regarding U.S. trade policies to gain clarity on future market prospects. This negative sentiment is likely to keep weighing on the Nasdaq index, with a particular focus on how the market responds to upcoming economic data and the effects of ongoing tariff policies.
