Gold approaches $3400 for first time ever
Gold prices rose in European trade on Monday and resumed the gains after a short hiatus in the last session, hitting fresh record highs and about to trade above $3400 an ounce for the first time ever.
It comes as the dollar swoons against major rivals, as investors lose confidence in the greenback due to heavy attacks by US President Donald Trump against Fed Chair Jerome Powell.
Prices
Gold prices rose 1.9% today to $3390 an ounce, a record high, with a session-low at $3227.
On Thursday, the precious metal lost 0.45%, the first loss in three days on profit-taking, with trading closed on Friday for the Good Friday holiday.
Gold rose 2.8% last week, the second weekly profit in a row on strong haven demand as the US-China trade war escalates.
US Dollar
The dollar index fell 1.1% today to three-year lows at 98.25 against a basket of major rivals.
It comes as investors' confidence deteriorates once more in the US economy due to perceived US government interference in the Federal Reserve.
The White House said it’s considering ways to fire Fed Chair Jerome Powell after Trump expressed urgent desires to terminate him due to disagreements about monetary policies.
Such news continues to rattle the markets, which depend heavily on the independence of the Federal Reserve from any political interference as a pivotal mainstay in the global financial system.
US Rates
Fed Chair Jerome Powell warned that ongoing tariffs and trade wars between the US and other countries could undermine the Fed’s ability to contain inflation and support growth.
Chicago Fed President Austin Goolsbey said he hopes the US won’t turn into an environment where the Fed’s ability to set monetary policies independently from political pressure is undermined.
According to the Fedwatch tool, the odds of a May Fed 0.25% rate cut stood at 12%.
The odds of such a cut in June stood at 70%.
SPDR
Gold holdings at the SPDR Gold Trust remained unchanged on Thursday at 952.29 tons.
Euro rallies to four-year peak on loss of dollar confidence
The euro rose in European trade on Monday against a basket of major rivals, expanding the gains against the dollar for the second straight session and hitting a four-year peak as it trades above the psychological barrier of $1.15 for the first time since late 2021.
It comes amid a growing loss of confidence in the dollar due to US President Donald Trump’s plans to restructure the Federal Reserve, which could impact its independence.
The Price
The EUR/USD price rose 1.25% today to $1.1533, the highest since November 2021, with a session-low at $1.1391.
The euro rose 0.25% on Friday against the greenback, the second profit in three days on thin holiday trading.
The pair rose 0.3% last week, the fourth weekly profit in a row on hopes for reaching a US-EU trade deal soon.
US Dollar
The dollar index fell 1.1% today to three-year lows at 98.25 against a basket of major rivals.
It comes as investors confidence deteriorates once more in the US economy due to perceived US government interference in the Federal Reserve.
The White House said it’s considering ways to fire Fed Chair Jerome Powell after Trump expressed urgent desires to terminate him due to disagreements about monetary policies.
Such news continues to rattle the markets, which depend heavily on the independence of the Federal Reserve from any political interference as a pivotal mainstay in the global financial system.
The ECB
The European Central Bank cut interest rates by 25 basis points to 2.25% as expected by most analysts today.
It’s the seventh consecutive rate cut as the ECB attempts to boost the struggling eurozone economy amid a trade war with the US.
ECB President Christine Lagarde said that tariffs represent a shock, but their impact on inflation remains unclear.
She said the picture might not become clear by the next policy meeting in June, as the 90-day pause on tariffs would still be in place by then.
European Rates
Reports showed that some ECB officials see a high probability of a rate cut in June.
Markets are pricing in a 60% chance of an ECB rate cut in June.
Yen rushes to seven-month high on Fed independence concerns
The Japanese rose in Asian trade on Monday against major rivals, expanding gains for the second straight session against the US dollar and hitting a seven-month high.
It comes amid strong haven demand as investors lose confidence in the US economy once more due to concerns about US President Donald Trump’s plans to restructure the Federal Reserve, which could impact its independence.
Recent data showed renewed inflation pressures on Bank of Japan policymakers, raising the odds of May interest rate hike.
The Price
The USD/JPY fell 1% today to 140.60, the lowest since September 2024, with a session-high at 142.11.
The yen rose 0.2% on Friday amid calm holiday trading.
IT surged 0.95% last week against the dollar, the third weekly profit in a row following aggressive remarks by Bank of Japan officials.
Fed’s Independence
The White House said it’s considering ways to fire Fed Chair Jerome Powell after Trump expressed urgent desires to terminate him due to disagreements about monetary policies.
Such news continue to rattle the markets, which depend heavily on the independence of the Federal Reserve from any political interference as a pivotal mainstay in the global financial system.
Japanese Rates
Recent Tokyo data showed core consumer prices rose in March, raising inflationary pressures once more on policymakers.
Bank of Japan Governor Kazuo Ueda said the central bank will continue to hike interest rates if inflation moves towards the 2% target.
He says the BOJ will monitor economic developments without prejudice due to uncertainty because of US tariffs.
Following the remarks and data, the odds of a 0.25% BOJ rate hike in May rallied from 10% to 35%.
US dollar loses ground in thin holiday trading
The US dollar fell against most major rivals on Friday amid thin trading due to the Good Friday holiday.
US President Donald Trump ordered a full tariff review of US critical minerals imports in another escalation in his trade war with global trade partners.
Otherwise, Fed Chair Jerome Powell said that tariffs and the ongoing trade war between the US and the world, especially China, could weaken the Fed’s ability to contain inflation and boost US growth.
Powel expects inflation to rise and growth to slow down, but it’s still not clear which one of them needs more focus amid trade uncertainty.
Powell said the Fed is assuming a wait and see stance until the dust clears before taking a monetary policy decision.
He also expects the economy to move away from full employment and contained inflation targets due to the impact of tariffs.
In response, Trump criticized Powell and said his “termination couldn’t come soon enough”.
The EUR/USD are trading near a week high at $1.1400, opening the door for more gains towards the major resistance at $1.1473, followed by $1.1498, then $1.1500.
The dollar index dipped 0.1% today as of 20:01 GMT to 99.2.