Gold Prices Surge Amid Trade Uncertainty and Economic Tailwinds

Warren Takunda

Commodity

Summary:

Gold prices edge higher as softer U.S. inflation data weakens recession fears, boosting equities and yields.

BUY XAUUSD

EXP

TRADING

2942.97

Entry Price

3000.00

2900.00

2997.24 +8.62 +0.29%

0.0

Pips

Flat

2900.00

Exit Price

2942.97

Entry Price

3000.00

Gold (XAU/USD) continues its upward trajectory, flirting with fresh all-time highs as traders digest a mix of economic data, trade policy uncertainties, and geopolitical developments. The precious metal is currently trading around $2,950 per ounce, reflecting renewed investor interest following a softer-than-expected U.S. Consumer Price Index (CPI) report.

The CPI data, released Wednesday, showed inflation cooling at a faster rate than anticipated, diminishing fears of prolonged stagflation or an impending recession. This triggered a shift in market sentiment, leading to an outflow from U.S. bonds and a subsequent surge in equity markets. The sell-off in Treasury securities pushed yields to a five-day high, further amplifying the bullish case for gold. Given that the metal serves as both a hedge against inflation and a safe haven during economic turbulence, its recent rally underscores investor uncertainty about future market conditions.

Beyond economic data, traders are closely monitoring developments on the geopolitical front. U.S. President Donald Trump announced on Wednesday that the United States would impose reciprocal tariffs on European imports starting April 2. This move, which could trigger retaliatory measures from the European Union, has added another layer of complexity to global trade dynamics.

In parallel, diplomatic efforts are underway to negotiate a ceasefire between Russia and Ukraine. U.S. officials are engaging with their Russian counterparts in an attempt to broker a deal that already has the backing of Ukraine, with Washington offering military support to Kyiv. While a successful resolution could ease geopolitical tensions, uncertainty surrounding the negotiations has fueled market volatility, keeping gold prices elevated.

The latest CPI figures have bolstered expectations that the Federal Reserve will implement a quarter-point interest rate cut in June. Lower interest rates tend to benefit gold, as the metal itself does not yield interest, making it more attractive in a low-rate environment.

Investment banks remain bullish on gold’s prospects. BNP Paribas forecasts that gold will breach $3,100 per ounce in Q2 2025, citing rising economic uncertainty due to Trump’s tariff policies. Meanwhile, Macquarie Bank warns that the U.S. budget outlook is deteriorating, which could stoke inflationary pressures and drive gold to $3,500 per ounce by Q3 2025.

Market expectations for Federal Reserve policy moves remain fluid. The CME FedWatch Tool indicates a 97% probability that the Fed will maintain current rates at its March 19 meeting, while the likelihood of a rate cut in May stands at 39.5%.

Technical Analysis

Gold’s breakout above the $2,930 resistance level has solidified its bullish trend. The metal faced brief consolidation before surging past this threshold, reinforcing expectations of further upside. Technical indicators suggest that the next major resistance lies at $2,956, followed by $2,962. A decisive break above these levels could pave the way for a sustained rally toward $3,000 and beyond.

On the downside, support is seen around $2,930, which now serves as a key pivot level. The recent low of $2,880 established earlier in the week remains a critical defense point for bullish traders. If gold fails to break higher on its next attempt, a period of high-level consolidation could ensue, delaying a sustained move upward.

For intraday traders, the focus remains on whether the price action will offer a buying opportunity on a pullback or confirm a bullish breakout above $2,956. If gold sustains its momentum above this level, it could trigger another wave of buying interest, potentially challenging all-time highs in the coming sessions.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 2943

STOP LOSS: 2900

TAKE PROFIT: 3000

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Alan

Forex

Summary:

Australia's exports face multiple challenges, with expectations of slowing economic growth weighing on the Australian dollar (AUD).

SELL AUDUSD

EXP

TRADING

0.62949

Entry Price

0.59100

0.64200

0.63044 +0.00221 +0.35%

0.0

Pips

Flat

0.59100

Exit Price

0.62949

Entry Price

0.64200

Fundamentals

Recently, the U.S. announced a 25% tariff on Australian steel and aluminum without exemptions, directly impacting Australian steel giant BlueScope Steel (which exports 300,000 tons of steel to the U.S. annually) and the aluminum supply chain. Although the short-term direct losses are limited (annual exports worth approximately AUD 790 million), the rise in global trade protectionism will exacerbate long-term uncertainties for Australia's resource exports. Additionally, the U.S. demand for "capacity relocation to the U.S. for tariff exemptions" forces Australian companies to adjust their supply chains, increasing cost pressures and further weakening the AUD's commodity currency attributes.

Moreover, Chinese steel mills' iron ore inventory days have dropped to an 8-year low (118 million tons, down 27% from the 2023 peak), compounded by the substitution of traditional steel demand with new energy technologies (e.g., hydrogen metallurgy, integrated casting). This dims the outlook for Australia's iron ore exports. BHP's inventory turnover days in Western Australia have risen to 47 days (historical average: 28 days), indicating worsening supply-demand mismatches. The multiplier effect of Chinese demand for Australian resources has declined from 2.4 in 2009 to 0.17, undermining the AUD's commodity pricing logic.

In general, Australia's export sector faces significant challenges, with expectations of slowing economic growth likely to weaken the AUD.

Technical Analysis

Export Pressures Weigh on AUD, Medium-Term Bearish Outlook_1

Based on the daily chart, AUDUSD has rebounded after a previous sharp decline but weakened again below the 0.6400 resistance level, indicating the overall bullish trend. Meanwhile, the RSI has fallen below 50, suggesting increasing bearish momentum and a higher likelihood of a depreciation.

If AUD/USD resumes its previous downtrend, the first target could be a break below 0.6000, potentially falling to 0.5800.

Selling at highs is recommended.

Trading Recommendations

Trading direction: Sell

Entry price: 0.6300

Target price: 0.5910

Stop loss: 0.6420

Valid Until: March 27, 2025, 23:00:00

Support: 0.6087/0.6000

Resistance: 0.6363/0.6400

Risk Warnings and Disclaimers

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Winkelmann

Forex

Summary:

The divergence in US-Canada monetary policies and the impact of tariffs have weighed on the CAD, with significant short-term support for USDCAD.

BUY USDCAD

Close Time

CLOSED

1.43949

Entry Price

1.45000

1.42800

1.44169 -0.00223 -0.15%

37.9

Pips

Profit

1.42800

1.44328

Exit Price

1.43949

Entry Price

1.45000

Fundamentals

On March 12, the Trump administration threatened to impose a 50% tariff on Canadian steel and aluminum products and warned of an increase in automobile tariffs to 25% by April 2. In retaliation, Canada announced a 25% retaliatory tariff on US$29.8 billion worth of US goods, covering agricultural and industrial products. The trade friction has led to short-term pressure on the CAD.

Meanwhile, the Bank of Canada cut interest rates by 25 basis points on March 12. Governor Tiff Macklem stated that "monetary policy cannot fully offset the impact of the trade war." Market concerns have risen that if US-Canada negotiations break down, the central bank may further ease its policy. The US February non-farm payroll data was robust, but a weak CPI has led the market to bet on a 125-basis-point rate cut within the year. The US dollar index has retreated from its highs to below 104, but protectionist policies may fuel imported inflation, limiting the downside for the dollar. The divergence in monetary policies and the impact of tariffs have severely weakened the CAD.

Technical Analysis

Tariff Tensions Drive CAD Under Pressure with Volatility as Main Theme_1

From the 4-hour chart, USDCAD surged and then retreated around the Bank of Canada's decision, failing to effectively break through 1.45, indicating that this level remains a strong resistance. In the short term, prices have stabilized around 1.436 after a pullback, with the overall trend still upward and showing signs of an upward turn. Traders can maintain a volatile trading strategy in the short term, waiting for a break above 1.45 to open up further upside space. Additionally, if the US PPI data released within the day reinforces inflation stickiness, it may briefly boost USDCAD.

Traders are advised to go long with a light position when USDCAD pulls back to around 1.436. The target is set around 1.45 and the stop-loss should below 1.43.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.436

Target Price: 1.450

Stop Loss: 1.428

Support: 1.436/1.430

Resistance: 1.450/1.453

Risk Warnings and Disclaimers

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Manuel

Economic

Forex

Summary:

This marks the second time the pair has faced selling pressure from this area, suggesting that a corrective move could be on the horizon.

SELL EURCHF

EXP

TRADING

0.96000

Entry Price

0.94500

0.96800

0.96057 +0.00372 +0.39%

0.0

Pips

Flat

0.94500

Exit Price

0.96000

Entry Price

0.96800

Safe-haven demand for the Swiss franc (CHF) is gaining traction as trade tensions between the United States and China escalate. In response to the latest round of tariff hikes imposed by U.S. President Donald Trump on Chinese imports, Beijing has retaliated with new tariffs ranging from 10% to 15% on select U.S. agricultural products, set to take effect on Monday.

China has announced a 100% tariff on Canadian agricultural goods in response to the tariffs Canada introduced in October. This decision adds to the ongoing trade tensions, which have been influenced by Trump’s protectionist policies.

Meanwhile, U.S. Commerce Secretary Howard Lutnick mentioned on Sunday night that the planned 25% tariffs on steel and aluminum imports—scheduled to take effect on Wednesday—are unlikely to be delayed, according to Bloomberg.

On the macroeconomic side, Switzerland’s inflation rate eased to 0.3% in February, the lowest level since April 2021, down from 0.4% in January. Additionally, the Swiss economy grew by just 0.2% in Q4 2024, slowing from 0.4% in the previous quarter and marking the weakest growth since Q2 2023. These trends have increased speculation that the Swiss National Bank (SNB) might introduce further rate cuts, with markets expecting one in March and possibly another in June.

Across Europe, the European Commission has unveiled retaliatory measures against the United States following Washington’s imposition of 25% tariffs on steel and aluminum. The European Union (EU) intends to introduce tariffs on U.S. industrial and agricultural goods starting April 1, targeting an estimated $28 billion worth of imports. Despite the countermeasures, European Commission President Ursula von der Leyen reaffirmed that the EU remains “open to negotiations.”

Additionally, Germany’s fiscal policies have prompted traders to reevaluate expectations for further European Central Bank (ECB) rate cuts. Initially, markets had priced in two additional reductions by the summer. However, ECB policymaker and Governor of the Bank of Finland, Olli Rehn, emphasized that inflation forecasts and underlying indicators suggest price growth is on track to align with the 2% target. Sellers Eye a Potential Reversal from Key Resistance in EUR/CHF_1

Sellers Eye a Potential Reversal from Key Resistance in EUR/CHF_1

Technical Analysis

EUR/CHF recently surged to a fresh local high of 0.9650, a level not seen since July of last year. However, this marks the second time the pair has faced selling pressure from this area, suggesting that a corrective move could be on the horizon. Notably, the Relative Strength Index (RSI) reached 84 on March 6 and has since pulled back to 71, still indicating overbought conditions on the 4-hour chart. If this level holds, further downside pressure may emerge.

The 100-period and 200-period moving averages are currently positioned at 0.9459 and 0.9443, respectively. Their close proximity to each other signals a phase of consolidation. Recent developments surrounding the euro have pushed EUR/CHF to elevated levels, making a period of consolidation or correction increasingly likely.

Key support levels to watch include 0.9516 and 0.9457. A break below these areas could pave the way for a deeper retracement, while sustained selling pressure at current levels may reinforce the bearish outlook.

Trading Recommendations

Trading direction: Sell

Entry price: 0.9600

Target price: 0.9450

Stop loss: 0.9680

Validity: Mar 21, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Economic

Forex

Summary:

The 12-hour Relative Strength Index (RSI) touched 72, signaling overbought conditions, which could reinforce further downside movement.

SELL EURGBP

EXP

TRADING

0.84000

Entry Price

0.82650

0.85000

0.83973 +0.00210 +0.25%

0.0

Pips

Flat

0.82650

Exit Price

0.84000

Entry Price

0.85000

The European Commission has announced retaliatory measures against the United States in response to the 25% tariffs imposed by the Trump administration on steel and aluminum. The European Union (EU) plans to introduce tariffs on U.S. industrial and agricultural goods starting April 1, amounting to $28 billion in trade restrictions. European Commission President Ursula von der Leyen emphasized that the bloc remains “open to negotiations” despite the countermeasures.

Meanwhile, Germany’s fiscal plans have led traders to reassess their expectations regarding further rate cuts by the European Central Bank (ECB). Initially, markets had priced in two additional rate reductions by the summer. However, ECB policymaker and Governor of the Bank of Finland, Olli Rehn, stated that inflation projections and underlying indicators suggest price growth is on track to align with the 2% target.

Across the Channel, the UK has opted not to retaliate immediately against U.S. steel tariffs. Instead, British officials will seek broader trade discussions to prevent further protectionist measures.

Market participants widely expect the Bank of England (BoE) to keep interest rates steady at 4.5%, as multiple policymakers have endorsed a “gradual and cautious” approach to monetary easing.

Last week, four BoE officials, including Governor Andrew Bailey, signaled a measured path toward unwinding monetary policy restrictiveness. They stressed that persistent inflation is unlikely to dissipate on its own, necessitating a carefully managed approach. However, BoE member Catherine Mann has taken a contrasting stance, advocating for a more aggressive easing strategy due to “significant volatility” in global financial markets, particularly from cross-border spillover effects.

This week, investor focus shifts to the UK’s monthly Gross Domestic Product (GDP) report, along with January’s Industrial and Manufacturing Production data, set for release on Friday. The UK economy is expected to have expanded at a modest pace of 0.1%, slowing from December’s stronger 0.4% growth. Additionally, factory output is projected to have declined in the first month of 2025. EURGBP Faces Selling Pressure After Failing to Break Resistance_1

EURGBP Faces Selling Pressure After Failing to Break Resistance_1

Technical Analysis

EUR/GBP recently reached a local high of 0.8447, a level not seen since January 24. However, this area has proven to be a formidable resistance zone, triggering a pullback as selling pressure builds. The 12-hour Relative Strength Index (RSI) touched 72, signaling overbought conditions, which could reinforce further downside movement.

The 100-period and 200-period moving averages, currently positioned at 0.8347 and 0.8330, respectively, could serve as initial downside targets. The first notable support area lies near 0.8350, and if these moving averages fail to hold, a deeper retracement toward 0.8263 could unfold.

Traders should closely monitor RSI developments to gauge the strength of potential bearish momentum from this resistance level.

Trading Recommendations

Trading direction: Sell

Entry price: 0.8400

Target price: 0.8265

Stop loss: 0.8500

Validity: Mar 21, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Economic

Commodity

Summary:

WTI crude has advanced to approximately US$66.50 per barrel, though upside potential appears constrained amid escalating concerns regarding U.S. economic expansion.

BUY WTI

EXP

PENDING

64.700

Entry Price

69.900

63.000

66.932 +0.419 +0.63%

Pips

PENDING

63.000

Exit Price

64.700

Entry Price

69.900

Fundamentals

WTI crude oil prices extended gains for a second consecutive day, trading at US$66.50 during Wednesday's European session. However, oil prices face downward pressure amid escalating demand concerns stemming from a potential U.S. economic slowdown and the impact of tariffs on global economic growth.

Investors are also closely monitoring peace negotiations and ceasefire drafts in Ukraine, with Trump potentially engaging in a call with Putin this week to discuss the matter. Positive developments suggest a potential end to the conflict, which could lead to a decline in commodity prices as the market anticipates increased Russian crude supply following the lifting of sanctions.

The upcoming U.S. Consumer Price Index (CPI) release could also influence risk sentiment and commodity price movements, as robust data may reinforce hawkish expectations from the Federal Reserve.

WTI crude may find direction from this week's EIA inventory data, with analysts anticipating a smaller-than-previously-reported build of 3.6 million barrels. This scenario would indicate sustained demand and could propel crude prices higher after nearing a bottom. Conversely, a larger build may signal weakening consumption and trigger a price decline.

Technical Analysis

WTI crude oil continued its gradual recovery from recent lows on Wednesday, potentially reversing from a downtrend as a double bottom pattern forms in the 1H timeframe. However, bulls have yet to test and breach the neckline of the key resistance level around US$68.00.

Meanwhile, bulls also need to break through the descending trendline resistance that has been in place since mid-February to confirm a reversal from the decline, with the 200 SMA dynamic inflection point acting as additional nearby resistance.

In terms of SMAs, the 100 SMA is below the 200 SMA, indicating that the path of least resistance is downward, or that the sell-off is more likely to gain momentum than to reverse.

The stochastic indicator also appears to be rising, suggesting increased bullish pressure, and the oscillator has room to move higher before reaching the overbought territory that reflects exhaustion. The Relative Strength Index (RSI) also needs to rise further to indicate overbought conditions or bullish exhaustion; therefore, WTI crude oil prices may continue to follow. The market still has lows, and trading is bottoming out.

Trading Recommendations

Trading Direction: Buy

Entry Price: 64.70

Target Price: 69.90

Stop Loss: 63.00

Valid Until: March 27, 2025 23:55:00

Support: 65.74, 64.99, 64.73

Resistance: 67.32, 67.92, 70.35

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Summary:

Market observers anticipate the Bank of Japan (BOJ) will gradually increase interest rates. While the BOJ is likely to hold steady next week, a rate hike is expected in May.

BUY USDJPY

EXP

TRADING

148.871

Entry Price

155.230

145.300

148.890 +1.086 +0.73%

0.0

Pips

Flat

145.300

Exit Price

148.871

Entry Price

155.230

Fundamentals

During the European session on Wednesday, the USDJPY experienced a modest recovery, yet it remains within a bearish trend. Despite market anticipation of a hawkish stance from the BOJ, the yen has failed to sustain significant upward momentum.

Recent surveys of financial institutions indicate that BOJ observers continue to project a gradual pace of rate hikes, even though they anticipate a higher terminal rate within the current cycle. The survey revealed that all 52 analysts expect no policy adjustments at the March 19th meeting. July remains the favored month for the next rate increase, with 48% of respondents anticipating a hike then, a decrease from the previous survey's 56%. Furthermore, 76% of those surveyed predict the BOJ will maintain a pace of approximately one rate hike every six months, with the subsequent increase occurring between June and September. Concurrently, the proportion of respondents forecasting an earlier rate hike has seen a slight uptick, with 13% anticipating the next increase on May 1, up from 4% in the prior survey.

MARKET WATCH: While the BO.J is highly likely to hold rates steady next week, the potential for a rate hike in May, rather than the widely expected July, is increasing due to persistent inflationary pressures. Remarks from BOJ Deputy Governor Shinichi Uchida last week did not signal an imminent rate increase. The financial markets currently assign only a 4% probability to a 25 basis point rate hike next week.

Nevertheless, the rationale for further policy tightening is strengthening, driven by accelerating inflation and wage growth. Given that inflation is projected to remain near the BOJ's 2% target for an extended period, we now forecast that the BOJ will raise rates to 1.5% by 2027.

Technical Analysis

The USDJPY breached above 148.45 on Wednesday, with an intraday bias remaining neutral to bullish, and the upside momentum intact.

The upside potential of the short-term rebound should be capped by the 150.92 level, which has now turned into resistance.

On the upside, a break above 151.31 would be early evidence of a trend reversal.

On the downside, a sustained break below the 61.8% retracement level of 146.32 from 139.57 to 158.86 would target the 139.57 support level.

From a broader perspective, the price action from 161.94 is viewed as a corrective pattern from the rise from 102.58 (2021 low), and the decline from 158.86 is the third leg of support. Strong support should be located at the 38.2% retracement level of 139.2 from 102.58 to 161.94. However, a sustained break below 139.26 would trigger a deeper medium-term decline to the 61.8% retracement level of 125.25.

Trading Recommendations

Trading Direction: Buy

Entry Price: 147.80

Target Price: 155.23

Stop Loss: 145.30

Valid Until: March 27, 2025 23:55:00

Support: 147.02, 146.53, 145.90

Resistance: 148.95, 149.32, 150.21

Risk Warnings and Disclaimers

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Risk Disclosure