The price of gold surged on Thursday following the announcement of new tariffs on car imports by U.S. President Donald Trump, which has escalated market uncertainties. Investors are flocking to safe-haven assets amid concerns about the impact of these policies on the global economy. The looming threat of additional tariffs on the European Union and Canada further complicates trade prospects, resulting in increased volatility in the gold market.
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GOLD
Gold prices jumped significantly on Thursday, trading around $3,050, after President Trump unveiled his new tariff policy. The proclamation he signed established a 25% tariff on car imports, which only heightened existing market uncertainties. The prevailing trade tensions have driven investors to seek refuge in safe-haven assets like gold, which is often considered a hedge against economic and geopolitical risks.
Moreover, Trump hinted at the possibility of additional tariffs against the European Union and Canada if these regions are perceived as detrimental to the U.S. economy. The threats of tariffs on sectors including timber, semiconductors, and pharmaceuticals are further complicating global trade dynamics. As more tariff policies are announced with insufficient clarity, the market is still awaiting greater certainty ahead of reciprocal tariffs set to begin in early April, which could spark volatility in gold prices.
OIL
Oil prices experienced a decline during the European session on Thursday, hovering around $69.20 per barrel after a three-day rally. This downturn is attributed to the market reassessing the potential impact of the 25% tariffs imposed on car imports by President Trump, which could exacerbate global trade tensions and weaken energy demand. Additionally, concerns about oil supply disruptions have intensified following reports that Reliance Industries, the world’s largest oil refinery based in India, intends to halt oil imports from Venezuela.
During the upcoming U.S. trading session tonight, oil prices may face volatility as the market reacts to the latest developments in trade policies and global supply dynamics. If trade tensions escalate, fears of an economic slowdown may further pressure oil prices. However, potential supply disruptions from Venezuela and Iran might provide some support.
EURUSD
The EURUSD currency pair staged a rebound on Thursday, halting a six-day downtrend. EURUSD briefly tested a three-week low around 1.0735-1.0730 during the Asian session before recovering to the 1.0780 territory. This uplift was driven by a moderate weakening of the U.S. dollar (USD) after it reached a three-week high. The decline of the USD is occurring amid fears of an economic slowdown due to President Trump’s newly announced tariffs of 25% on car and light truck imports.
Tonight’s U.S. trading session may see the EURUSD exhibit volatility as trade policy developments and global equity market movements unfold. Should concerns about escalating trade wars between the U.S. and the European Union intensify, the USD, as a safe-haven asset, could strengthen again, limiting any further gains for the EURUSD. However, if pressure on the USD continues, this pair may challenge higher resistance levels above 1.0800.
GBPUSD
GBPUSD strengthened to a level of 1.2929 during the European session on Thursday, continuing its recovery after a five-day correction from a four-month high around 1.3000. The pair’s appreciation occurred despite Trump implementing a 25% tariff on car and component imports. A weaker U.S. dollar also played a supportive role, with the USD dropping to 104.30 after having previously peaked at 104.70. The outlook from Federal Reserve official Neel Kashkari, who supports maintaining current interest rates for an extended period, further burdened the USD and boosted GBPUSD.
In tonight’s trading session, GBPUSD may experience volatility as the market focuses on U.K. fiscal policies and the impact of U.S. tariffs on the global economy. If the USD strengthens again due to rising risk sentiment, GBPUSD might come under pressure. However, if the market anticipates that higher tariffs will slow down the U.S. economy, the ongoing pressure on the USD may lead GBPUSD to test higher levels. Market participants will also be watching for comments from Federal Reserve officials and U.S. economic data for further direction regarding this currency pair.
USDJPY
USDJPY appreciated during the European session on Thursday, reaching a peak of 150.900 amid a weakening Japanese yen (JPY). The market sentiment has turned more optimistic due to expectations of additional stimulus from China, encouraging investors to favor riskier assets and reducing the demand for the JPY as a safe-haven currency. Nonetheless, uncertainty surrounding President Trump’s new tariff policies may still support the yen.
Additionally, expectations of a potential interest rate hike by the Bank of Japan (BoJ) help sustain the JPY’s value. However, the divergence in policy direction between the BoJ and the Federal Reserve may hinder significant increases in USDJPY. The Fed is expected to cut interest rates twice this year, potentially undermining the strength of the U.S. dollar.
NASDAQ
NASDAQ remains under pressure following a significant drop attributed to declines in technology stocks due to fears regarding the import tariffs that President Trump plans to announce. Market sentiment turned increasingly negative after the White House confirmed the new tariff plans, prompting a hefty sell-off in the technology sector.
Nvidia shares plummeted nearly 6%, while other large tech firms like Meta, Amazon, and Alphabet recorded declines of over 2% to 3%. Tesla also faced pressure, declining by more than 5%. The uncertainty surrounding these tariff policies increasingly weighs on the market, leading investors to adopt a cautious approach when positioning themselves in technology stocks.
