Gold Consolidates Ahead of Key US Data Releases
The gold (XAU/USD) price was relatively unchanged on Wednesday as markets remained cautious ahead of upcoming inflation data and news regarding US President Donald Trump's tariff plans.
The bullish trend is still in place. We are not surprised by a period of consolidation ahead of some piece of important data', said David Meger, director of metals trading at High Ridge Futures. On Tuesday, Trump initiated an investigation into potential copper import tariffs, aiming to revitalize domestic production of this crucial metal for various sectors. New trade tariffs are recognized as inflationary and may precipitate global economic instability. Thus, safe-haven flows into the precious metals increased over the past months, which explains why XAU/USD has been rising almost uninterruptedly for most of 2025.
In addition, central banks remain key bullion buyers as they aim to diversify their reserves amid the changing geopolitical landscape. 'Central bank behavior will be key to gold's fortunes, as they have been an important element for demand in recent years', said in a note Frank Watson, market analyst at Kinesis Money.
XAU/USD was falling during the Asian and early European trading sessions as the US dollar rebounded from its recent lows, putting downward pressure on gold. Today, the main focus is on the US macroeconomic reports: Gross Domestic Product (GDP) and Durable Goods Orders at 1:30 p.m. UTC.
Stronger-than-expected figures could delay further rate cuts, pushing XAU/USD slightly lower. Conversely, worse-than-expected results may weaken the greenback and pull the gold price higher. 'Spot gold may revisit its 26 February low of $2,891 per ounce, as the consolidation above this level seems to be shaped into a wedge', said Reuters analyst Wang Tao.
Euro Is Under Pressure as US Dollar Rebounds
The euro (EUR/USD) lost 0.29% against the US dollar (USD) on Wednesday. The greenback strengthened as investors reassessed the condition of the US economy and started to price in more tariffs after President Donald Trump's recent comments.
The greenback fell by nearly 4% from a more than two-year high hit in January due to worries about US economic growth. However, bearish expectations have now been priced in, and traders have started to bet that the upcoming data may be better than anticipated. Thus, the US Dollar Index (DXY) started to rebound.
Brad Bechtel, global head of FX at Jefferies, said:
"We've had a pretty good sell-off since January, a lot of that's been fueled by the adjustment lower in US real rates, which was largely fueled by the underperforming data we've been seeing, including yesterday. We're at a stage now where we're probably just going to chop around for a bit until we hear more about what's actually happening with tariffs."
Meanwhile, eurozone economic statistics continue to disappoint. German weaker-than-expected GfK Consumer Climate report indicated that sentiment dropped towards −24.7, its lowest point since March 2024. The eurozone's economic outlook is further complicated by geopolitical uncertainties, such as ongoing global trade tensions and the effects of international conflicts, specifically the one in Ukraine. These factors contribute to high energy costs and make it difficult for the European Central Bank (ECB) to balance high growth with low inflation.
EUR/USD was falling during the Asian and early European trading sessions. Today, the market focuses on the US macroeconomic reports at 1:30 p.m. UTC: Gross Domestic Product (GDP) and Durable Goods Orders data. Stronger-than-expected figures could delay rate cuts by the Federal Reserve, pushing EUR/USD below 1.04250. Conversely, worse-than-expected results may weaken the greenback and pull EUR/USD above 1.05079.
Japanese Yen Moves Sideways Ahead of Key Reports
The Japanese yen (USD/JPY) was relatively flat against the US dollar (USD) on Wednesday, even as the greenback strengthened due to tariff concerns.
USD/JPY has been declining for most of 2025 but found some support in the 148.600 area and has been moving sideways for the past week. A significant factor contributing to the yen's rise is the decline of US Treasury yields. The decrease in yields reduces the attractiveness of holding US dollar-denominated assets, increasing demand for the yen.
Simultaneously, Japanese government bond yields have been rising, fuelled by market expectations that the Bank of Japan (BoJ) will continue monetary policy normalization by raising interest rates. This anticipation of higher Japanese yields further strengthens the currency. Atsushi Mimura, Vice Minister of Finance for International Affairs, reinforced this view by stating that the yen's recent strengthening is consistent with the positive economic data. This indicates that the Japanese government believes the yen appreciation is a consequence of a strengthening domestic economy.
USD/JPY was rising during the Asian and early European trading sessions as the US Dollar Index (DXY) moved higher ahead of today's critical macroeconomic reports. The Gross Domestic Product (GDP) report and Durable Goods Orders data are due at 1:30 p.m. UTC and may significantly impact all USD pairs. Stronger-than-expected figures could pause the Federal Reserve's easing cycle, pushing USD/JPY above 149.773. Conversely, worse-than-expected results may weaken the greenback and pull USD/JPY below 148.570. Additionally, JPY traders should monitor the Tokyo Consumer Price Index (CPI) report at 11:30 p.m. UTC. The data is a leading indicator of nationwide inflation trends in Japan and may determine the BoJ's short-term monetary policy path.