Image Source: Unsplash

• Gold surged to a fresh all-time high as safe-haven demand rose ahead of Trump’s auto tariff deadline.
• Despite the uptick in the core PCE, Fed’s Daly sees two cuts in 2025, with the market now pricing in 73.5 bps of easing.
• The DXY index weakened while US yields slid. Additionally, global tensions mounted as Canada and the EU prepped retaliation plans.

The price of gold rallied sharply on Friday, as it hit a new record high of $3,086 amid uncertainty over US trade policy. Additionally, an uptick in the Federal Reserve's preferred inflation gauge was seen. After this, traders seemed confident that the Fed could cut rates twice in 2025. The XAU/USD currency cross was seen trading at around 3079, up approximately 0.79%.

The market mood was pessimistic as traders continued to brace for April 2, the so-called “Liberation Day” by US President Donald Trump, who signed an executive order applying 25% tariffs on all cars imported to the US. This triggered reactions worldwide, primarily in Canada and the European Union, which began preparing to retaliate against this measure.

In the meantime, the greenback remained battered and appeared set to finish the week with losses of 0.11%, according to the US Dollar Index, which underpinned the prices of precious metals. US yields were also seen dropping as investors seeking safety piled into bullion and the Japanese yen.

The US economic calendar revealed that the Core Personal Consumption Expenditures (PCE) Price Index in February was mostly aligned with forecasts, while the University of Michigan Consumer Sentiment survey in March deteriorated further.

Aside from this, San Francisco Fed Mary Daly stated that she foresees two rate cuts in 2025, adding recently that she is focused 100% on inflation due to progress being flat.

Meanwhile, money markets priced in 73.5 basis points of Fed easing in 2025, with a jump of ten basis points from the previous day, according to Prime Market Terminal interest rate probabilities.

(Click on image to enlarge)

Source: Prime Market Terminal

Next week, the US economic docket will feature the April 2 Trump tariff announcement, the ISM Manufacturing PMI for March, JOLTS Job Openings, and Nonfarm Payrolls.

Market Movers: Gold Price Appeared Set to Challenge $3,100 Level in the Short-Term

• The US 10-year Treasury note yield plummeted as it declined by 10 basis points at 4.259%. US real yields edged down 7 and a half bps to 1.887%, according to US 10-year Treasury Inflation-Protected Securities (TIPS) yields.
• The Personal Consumption Expenditures (PCE) Price Index held steady at 2.5% year-over-year in February, according to the US Bureau of Economic Analysis.
• Core PCE, which excludes food and energy, rose 2.8% year-over-year, up slightly from the upwardly revised 2.7% in the previous month. While largely maintaining the status quo, these readings seemed to indicate that inflation has remained above the Fed’s 2% target.
• The University of Michigan’s Consumer Sentiment Index dipped from a preliminary 57.9 to 57.0, as US households grew more pessimistic.
• One-year inflation expectations climbed to 5%, while five-year expectations rose from 3.9% to 4.1%, reflecting rising consumer concerns over future price pressures.

XAU/USD Technical Outlook: Gold Price Rallied Past $3,050 Level With Eyes On $3,100

(Click on image to enlarge)

Gold’s rally continued, as the yellow metal appeared to be poised to hit a record high of $3,086, clearing the path to challenge the $3,100 mark. Momentum seemed to suggest that bullion prices could extend their gains past the latter mark, with the psychological $3,150 and $3,200 areas potentially becoming exposed if cleared.

Due to the aggressiveness of the uptrend, the Relative Strength Index (RSI) turned overbought, exceeding 70. Nevertheless, the most extreme reading would be 80, as of the time of writing. Conversely, if the XAU/USD currency cross was to pass below March’s high of $3,057, such a move could exacerbate a pullback toward the $3,000 level.

More By This Author: