Gold Firms on Weaker Dollar, Ukraine Peace Uncertainty
Gold prices edged up on Monday, helped by a weaker dollar, while a delay in finding peace in Ukraine and concerns over the U.S. tariff policy fuelled safe-haven demand for the metal. Spot gold added 0.1% to $2,860.25 an ounce by 0750 GMT, while U.S. gold futures rose 0.8%. The dollar index fell 0.3% from a more than two-week high hit in the previous session.
Geopolitical uncertainty, such as the stalled Ukraine peace talks and rising tensions over trade policies, may continue to drive investors towards safe-haven assets like gold, potentially supporting prices in the coming weeks.
As interest rates remain elevated, the allure of gold as a hedge against inflation will likely wane, making its performance more sensitive to changes in monetary policy and economic growth.
Gold steadied on Monday as a stronger U.S. dollar countered safe-haven demand amid trade war concerns, while investors looked to inflation data this week for clues on the Federal Reserve's next interest rate decision. Spot gold was at $2,913.09 an ounce at 0946 GMT, while U.S. gold futures firmed 0.2% to $2,920.10. The dollar index held above last week's four-month low, making gold more expensive for holders of other currencies.
A stronger dollar could be a harbinger of economic growth, as increased liquidity and consumer spending often accompany rising interest rates.
What will happen if inflation does indeed rise, as market expectations suggest, and the Fed hikes rates further to combat it?
Gold prices dipped slightly as investors adopted a cautious stance ahead of the upcoming U.S. payrolls data release, despite a weaker dollar providing some support. Spot gold fell 0.1% to $2,913.79 an ounce, reflecting a broader trend of investors waiting for clearer signals before making substantial moves in the market. The upcoming jobs report, coupled with ongoing trade war concerns, continues to keep gold prices elevated, maintaining interest in the safe-haven asset.
This moment of hesitation among investors highlights the delicate balance in the market, where economic indicators can drastically sway sentiment and influence gold prices.
What implications will the U.S. jobs data have on investor confidence in gold as a safe-haven asset amidst ongoing economic uncertainties?
Gold rebounded after its worst week of the year as investors weighed the potential impact of Trump tariffs, with gold futures gaining more than 1.5% on Monday to hover below $2,900. The precious metal's recent move higher comes as President Donald Trump's latest tariff deadline approaches at the end of Monday, with potential new duties starting Tuesday morning on America's top three trading partners. Strategists attribute much of the rally to continued central bank buying and uncertainty over US tariffs.
This surge in gold prices highlights the market's growing reliance on safe-haven assets as investors increasingly view trade tensions and economic uncertainty as major risk factors.
How will a potential escalation of trade tensions between the US and its trading partners affect the global supply chain, particularly for commodities like gold?
Gold prices declined about 1% on Thursday as investors took profits following a three-day rally, with markets now eyeing U.S. jobs data on Friday for clues on the Federal Reserve's rate path amidst rising global trade worries. Spot gold has gained over 10% so far this year, hitting a record high of $2,956.15 on February 24. Investors are turning to gold as a safe-haven asset when faced with geopolitical and economic uncertainties.
The current bearish price action may signal further downside for gold if prices break below the $2,900, potentially dragging it lower toward $2,880.
How will the market's reaction to the U.S. jobs report on Friday impact investor sentiment towards precious metals in the coming weeks?
Gold steadied near $2,910 an ounce after gaining almost 2% last week, driven by investor anxiety about the disruption caused by the Trump administration's trade policies and signs of sustained central-bank buying. The precious metal has surged in the opening quarter of 2025, hitting successive records and gaining every week apart from one, as investors seek safe-haven assets amid rising economic uncertainties. Bullion-backed exchange-traded funds have been attracting inflows for the past six weeks to reach the highest level since December 2023.
The rising concerns about global economic uncertainty are having a profound impact on traditional asset classes like stocks and bonds, forcing investors to seek alternative havens in gold.
What role will the Federal Reserve play in shaping the trajectory of gold prices over the next few months, particularly as it prepares to announce its next policy decision later this month?
Gold prices experienced a slight decline as investors anticipated the economic repercussions of newly imposed tariffs by U.S. President Donald Trump on Canada, Mexico, and China. The introduction of these tariffs has created uncertainty in global trade relations, contributing to fluctuations in gold prices while simultaneously driving safe-haven investment in bullion. Market analysts predict that the ongoing trade conflicts and inflation concerns may influence the Federal Reserve's monetary policy, affecting gold's appeal as a non-yielding asset.
This situation highlights the interconnectedness of trade policies and commodity markets, revealing how geopolitical decisions can have immediate effects on investment strategies.
How might the evolving landscape of U.S. trade relations reshape the global demand for precious metals in the near future?
Gold prices rose significantly after President Donald Trump announced sweeping tariffs on Canada and Mexico, prompting swift retaliatory measures from these countries and China. The escalation of the trade war has led to a surge in demand for safe-haven assets like gold, which climbed above $2,915 an ounce as Beijing imposed 15% duties on some American farm goods. Geopolitical tensions have also fueled investor concerns about economic instability.
This significant increase in gold prices may signal a shift in investor sentiment towards more stable assets, potentially reflecting growing anxiety about the ongoing trade war and its implications for global markets.
Will central banks' response to this surge in safe-haven asset demand lead to increased interest rates or monetary policy easing, which could have further far-reaching consequences for financial markets?
Gold prices have risen after a sharp correction, as investors weigh the economic outlook amid US President Donald Trump's plans to implement import levies against key trade partners. The precious metal's value is boosted by concerns over a potentially cooling US economy and the implications of Trump's tariffs on inflation. As the Federal Reserve considers rate cuts in response to economic uncertainty, gold's haven status is reinforced.
The rising price of gold can be seen as a reflection of market anxiety about the potential consequences of Trump's trade policies on global economic growth, highlighting the need for investors to diversify their portfolios in uncertain times.
What role will gold play in the event of a stagflationary scenario, where economic slowdowns are coupled with rising inflation pressures, and how might this impact investor sentiment towards other asset classes?
Gold prices are on track for a weekly gain driven by safe-haven demand amid a disappointing U.S. jobs report that indicates slower job growth than anticipated. The report revealed a rise of 151,000 jobs in February, falling short of the expected 160,000, which coupled with a weaker dollar, has bolstered gold's appeal as a safe investment. Despite a slight decline in prices on Friday, the overall market sentiment remains supportive of gold, with expectations of potential Federal Reserve interest rate cuts later this year.
The interplay between weaker economic indicators and safe-haven assets like gold highlights a critical moment for investors as they navigate uncertainty in monetary policy and global markets.
What long-term effects could continued safe-haven demand for gold have on its pricing and the broader commodities market?
Gold had a standout year in 2024, with investors adding to their gold holdings and central banks buying up the metal, despite slowing consumer demand. Rising market uncertainty and geopolitical tensions have made gold a safe-haven asset, driving its price higher. Analysts predict that gold prices could rise further in 2025, driven by optimistic investor sentiment.
The surge in gold demand reflects a growing trend of investors seeking safe-haven assets during times of economic uncertainty, potentially leading to increased investment in other precious metals and cryptocurrencies.
What will be the impact on the global economy if central banks continue to buy large quantities of gold, potentially destabilizing financial markets and leading to higher inflation rates?
China's gold reserves rose to 73.61 million fine troy ounces at the end of February from 73.45 million at the end of January, as the central bank kept buying the precious metal for a fourth straight month, further fueling investor sentiment and supporting the gold price amid rising geopolitical uncertainty and trade tensions with the US. The PBOC's continued purchases are seen as a key factor in underpinning gold prices, but also pose questions about the sustainability of such policies. Central banks' gold buying has been instrumental in driving gold prices up over the past two years.
This uptrend in central bank gold buying highlights the evolving role of monetary policy in shaping precious metal markets, where state-backed purchases can have far-reaching implications for global supply and demand balances.
Will the PBOC's ongoing gold buying effort be enough to shield China's economy from potential downturns triggered by trade tensions with the US and rising domestic debt?
Asian share markets made guarded gains on Monday as investors waited anxiously to see if imminent tariffs would go ahead, while bitcoin surged on news it would be included in a new U.S. strategic reserve of cryptocurrencies. Markets still unsure if U.S. tariffs will go ahead Nikkefutures rallied 1.7%, S&P 500 futures up 0.2% Euro up on hopes for progress on Ukraine-Russia deal
The surge in bitcoin prices may indicate a growing acceptance of cryptocurrency among mainstream investors, potentially paving the way for increased regulation and adoption.
Will the new U.S. strategic reserve of cryptocurrencies serve as a catalyst for more countries to develop their own digital asset management frameworks, or will it create a global race to standardize regulations?
The US dollar has experienced its most significant drop since President Trump took office, largely due to concerns that recently imposed tariffs will negatively impact the economy. This downturn, particularly against the euro, is accentuated by expectations of monetary easing from the Federal Reserve as the potential for a global trade war looms. Additionally, Germany's plans for increased defense and infrastructure spending have contributed to the euro's strength, further pressuring the dollar.
The situation highlights the intricate relationship between trade policies and currency valuation, where tariffs intended to protect domestic interests may inadvertently weaken national currency strength.
What strategies might the Federal Reserve consider to stabilize the dollar in an environment of increasing global trade tensions?
S&P 500 futures showed a slight increase as investors awaited the Federal Reserve’s preferred inflation measure, which could influence future interest rate decisions. Meanwhile, Bitcoin experienced a significant decline of over 25% since its January peak, driven by fears of a trade war following President Trump's tariff announcements. The broader market remains cautious, with concerns about the potential economic impacts of the proposed tariffs on Canada, Mexico, and China.
This situation illustrates the delicate balance investors must navigate between inflationary pressures and geopolitical tensions, which can dramatically shift market dynamics.
What strategies might investors adopt to mitigate risks in an increasingly volatile economic landscape?
The Japanese yen and Swiss franc strengthened against the dollar on Monday as investors sought safe-haven currencies due to lingering worries over tariffs and a U.S. economic slowdown. Risk-averse investors have slashed net long dollar positions to $15.3 billion from a nine-year high of $35.2 billion in January, sending both currencies to multi-month highs.
The surge in demand for safe-haven assets highlights the ongoing concerns about trade tensions and their impact on global growth, underscoring the need for policymakers to address these issues.
Will the recent sell-off in the dollar lead to a prolonged period of weakness, or can it find support from the strong U.S. labor market data?
US stocks inched higher on Friday following a key inflation reading that largely met expectations, providing some relief to investors, but Trump's renewed tariff threats have added to global economic uncertainty. Investors are waiting for the release of the Federal Reserve's preferred inflation gauge as they eye Trump’s latest trade threats. The S&P 500 (^GSPC) climbed 0.6%, while the tech-heavy Nasdaq Composite (^IXIC) rose about 0.7% after suffering a Nvidia-led (NVDA) sell-off on Thursday.
As markets grapple with increasing uncertainty, it is essential to consider the broader implications of Trump's trade policies on global economic stability and consumer sentiment.
How will the ongoing trade tensions between the US, China, and EU impact the trajectory of corporate earnings and investor confidence in the coming months?
The world's largest jewelry market in India is driving a surge in gold bets through options on gold futures, with traders and investors seeking to hedge physical holdings or speculate on price movements. The recent record-breaking prices of gold have made options trading more appealing than traditional futures contracts, which are typically cheaper but offer less flexibility. As the Indian market continues to drive demand for gold, analysts are predicting a bullish outlook for the precious metal.
This boom in gold bets may signal a shift in investor sentiment towards safe-haven assets, potentially mirroring broader trends seen during periods of economic uncertainty or geopolitical tensions.
How will the increased focus on gold and precious metals affect India's position as a leading market for luxury goods, and what implications might this have for global trade and economic dynamics?
The Japanese yen and Swiss franc have strengthened against the dollar as traders seek safe-haven currencies amid ongoing trade tensions and fears of a U.S. economic slowdown. Recent developments, including President Trump's tariffs on trading partners and the subsequent delay of some measures, have led to decreased confidence in the U.S. economy, prompting investors to shift their positions. As a result, both currencies have reached multi-month highs, reflecting a broader risk-averse sentiment in the global markets.
This trend highlights the significant impact of geopolitical factors on currency markets, illustrating how investor psychology can drive shifts in currency strength and market dynamics.
What long-term effects could these trade tensions have on the global economy, particularly in relation to currency stability and international trade relations?
Oil prices are down over 1% on Friday and were headed for their first monthly drop since November, as markets braced for Washington's tariff threats and Iraq's decision to resume oil exports from the Kurdistan region. Uncertainty surrounding OPEC's production resumption plans in April and ongoing peace talks to end the war in Ukraine also weighed on investor sentiment. The more active May Brent crude futures slipped 88 cents, or 1.20%, to $72.69 a barrel by 1212 GMT.
As oil prices fluctuate with global tensions, it highlights the interconnectedness of geopolitics and commodity markets, where even minor shifts in policy can send shockwaves through the industry.
Can policymakers find a balance between economic growth and price stability, or will ongoing trade wars and supply chain disruptions become a permanent fixture of the energy landscape?
Oil prices held steady on Monday as concern over the impact of U.S. tariff uncertainty and rising output from OPEC+ producers pressured prices while potential sanctions on Iranian oil exports provided some support. WTI and Brent benchmarks register multiple weekly declines, with Brent falling for a third consecutive week, while U.S. West Texas Intermediate crude was at $67.14, also up 10 cents. Investors view uncertainty over U.S. tariffs as negative, but possible sanctions against Iran and Russia could provide support in the short term.
The prolonged period of tariff-related volatility may have become a permanent fixture on investors' risk assessments, leading to increased scrutiny of commodity prices and market stability.
Will the oil market's sensitivity to U.S. trade policies continue to be a driving force behind price swings, or will other factors such as geopolitics and macroeconomic trends begin to gain more prominence?
The US dollar declined to multi-month lows against major currencies following weaker-than-expected job growth in February, as the Federal Reserve is likely to cut interest rates multiple times this year. The decline was accompanied by a boost for the euro, which is poised for its best weekly gain in 16 years. Fed Chair Jerome Powell repeated comments that the central bank will be cautious in responding to economic changes.
The softening labor market may provide some relief to the Federal Reserve as it evaluates inflationary pressures, but the uncertainty surrounding trade and tariff policies remains a concern.
How will the ongoing trade tensions between the US and other countries impact the dollar's value in the coming months?
Iron ore futures fell for a sixth straight session on Monday amid rising trade tensions between the U.S. and top consumer China, outweighing upbeat Chinese manufacturing data. The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) ended daytime trade 2.81% lower at 779.5 yuan ($106.91) a metric ton. Earlier in the session, prices hit 777.5 yuan, the lowest since January 14.
The escalating US-China trade tensions are having far-reaching consequences for global commodity markets, particularly those that rely heavily on Chinese demand and supply chains.
How will the ongoing trade tensions impact the sustainability of China's economic recovery, which appears to be gaining momentum despite recent sluggish growth data?
Investors are awaiting the release of the Federal Reserve's preferred inflation gauge as they eye Trump’s latest trade threats. US stock futures edged higher on Friday in the wait for a key inflation reading, as fresh tariff threats added to uncertainty over Big Tech prospects. Contracts on the S&P 500 (^GSPC) and the tech-heavy Nasdaq 100 (NQ=F) both rose about 0.3%, after suffering a Nvidia-led (NVDA) sell-off on Thursday.
This recent market volatility could serve as a wake-up call for investors to reassess their portfolios, potentially leading to more prudent risk management strategies.
Will the ongoing uncertainty surrounding trade policies have a lasting impact on market sentiment, or will investors' appetite for growth stocks eventually outweigh concerns about tariffs?
Oil edged up on Monday as upbeat manufacturing data from China, the world's biggest crude importer, led to renewed optimism for fuel demand, although uncertainty about a Ukraine peace deal and global economic growth from potential U.S. tariffs loomed. Brent crude climbed 19 cents, or 0.3%, to $73.00 a barrel by 0720 GMT while U.S. West Texas Intermediate crude was at $69.95 a barrel, up 19 cents, or 0.3%. China's manufacturing activity expanded at the fastest pace in three months in February as new orders and higher purchase volumes led to a solid rise in production.
The synchronized global economic recovery will likely be disrupted by rising tensions between major powers, forcing nations to reassess their energy policies and prioritize stability over growth.
How will the interplay between oil prices, trade wars, and emerging markets influence global energy security and economic resilience in the face of escalating geopolitical uncertainty?
US stocks pointed mostly lower Friday following a key inflation reading that largely met expectations and as fresh tariff threats added to uncertainty over Big Tech prospects. The S&P 500 (^GSPC) wavered around the flatline, while the tech-heavy Nasdaq Composite (^IXIC) was down about 0.4% after suffering an Nvidia-led (NVDA) sell-off on Thursday. The Dow Jones Industrial Average (^DJI) added 0.2%.
The uncertainty surrounding Big Tech and trade policies may be having a more profound impact on market sentiment than the latest inflation data, which could be masking underlying issues with economic growth.
As investors continue to navigate this complex landscape, will the recent decline in interest rates prove to be sufficient to counteract concerns about potential future rate cuts?