Gold Is Projected to Rise by Over $1,000 This Year
The gold (XAU/USD) price surged by 1.27% on Monday, driven by very strong safe-haven demand. The rise happened due to concerns over potential tariffs that could fuel inflation and slow economic growth.
The demand for safe-haven assets has put gold on track for its best quarterly performance since 1986.
"The ongoing uncertainty regarding tariffs has affected equity markets and brought another round of safe-haven buying into the gold market. There are certain technical areas of resistance along the way that could cause a little profit-taking or pullback. But the ongoing bullish trend remains in place. The fundamental underpinnings remain in place", said David Meger, director of metals trading at High Ridge Futures.
US President Donald Trump is expected to announce reciprocal tariffs on 2 April, while automobile tariffs take full effect on 3 April. Trump also said he would impose secondary tariffs of 25–50% on buyers of Russian oil if he feels Moscow is blocking his efforts to end the war in Ukraine.
Gold has experienced substantial growth, rising by approximately 18% since the year’s beginning, following a more than 27% increase in 2024. This surge is attributed to supportive monetary policies, substantial central bank purchases, and increased retail and investor demand via exchange-traded funds (ETFs). Also, the gold price is supported by general repositioning into safe-haven assets amid a broader de-dollarisation trend, partly driven by geopolitical uncertainty. According to Reuters, Wall Street big banks have raised their outlook on gold prices. Goldman Sachs expects gold to surpass $4,500 within the next 12 months under extreme market conditions.
XAU/USD rose during the Asian and early European trading sessions. Today, traders should continue monitoring developments on global trade tariffs and potential progress in Russia–Ukraine peace negotiations. In addition, US macroeconomic releases may trigger extra volatility. ISM Manufacturing Purchasing Managers’ Index (PMI) and JOLTS Job Openings are due at 3:00 p.m. UTC. Higher-than-expected figures may pause the rally in XAU/USD but are unlikely to break the trend. Lower-than-expected results may push the pair above $3,160.
"Spot gold may rise into a range of $3,153 to $3,163 per ounce, as it is about to break resistance at $3,139", said Reuters analyst Wang Tao.
Euro Remains in a Sideways Mode
On Monday, the euro (EUR/USD) traded within a broad 1.08150–1.08500 range against the US dollar (USD) but finished the day essentially unchanged.
The uncertainty around US tariffs keeps traders on the sidelines as they wait for clarity on US President Donald Trump’s trade policies. Traders are reluctant to open big orders. They are highly uncertain about the market’s next move and worry ahead of a new round of reciprocal tariffs that the White House is expected to announce on Wednesday. ’I think we all need some certainty around tariffs, trade, and taxes, and maybe we’ll get much of that come 2 April’, said Tim Holland, chief investment officer at Orion. The market remains in wait-and-see mode, hoping that new details will emerge in the next few days and push EUR/USD out of its sideways range.
Meanwhile, Christine Lagarde, President of the European Central Bank (ECB), said that the implementation of the US tariffs means Europe will have to take better control of its future. She suggested that the Eurozone should raise its own tariffs in response. Goldman Sachs, a major US investment bank, raised the probability of a US recession from 20% towards 35%. It also projected three interest rate cuts each from the Federal Reserve (Fed) and the ECB, up from its previous expectation of two reductions.
EUR/USD remained relatively unchanged during the Asian and early European trading sessions. Traders should closely monitor any news about US trade tariffs and Russia–Ukraine peace negotiations. Also, the US will release several economic reports that may increase volatility. ISM Manufacturing Purchasing Managers’ Index (PMI) and JOLTS Job Openings will come out at 3:00 p.m. UTC. Also, the eurozone Consumer Price Index (CPI) report is due at 9:00 a.m. UTC. The data may provide clues on future changes in ECB interest rates. Key levels to watch are resistance at 1.08480 and support at 1.07820.
British Pound Lacks Data to Establish a Clear Trend
On Monday, the British pound (GBP/USD) lost 0.15% against the US dollar (USD) but generally continued to trade sideways.
After reaching a four-month high in mid-March, GBP/USD has been struggling to find a well-defined direction. This lack of clear movement is influenced by global economic uncertainty, particularly the potential impacts of the newly imposed and proposed trade tariffs. Also, the uncertainty surrounds the U.K.’s economic outlook and potential Bank of England (BoE) policy changes. These contribute to investors’ indecision. Overall, the potential of US tariffs to disrupt global trade relationships and a vague understanding of how it will impact the U.K. economy is a key factor in the market indecision. Therefore, traders are cautious as they wait for more data before opening trades.
Meanwhile, Keir Starmer, the British Prime Minister, and Donald Trump discussed ’productive negotiations’ towards a U.K.–US economic prosperity deal. According to Reuters, economists expect Trump’s tariffs to impact Britain less due to the country’s more balanced trading position.
"There is some stress, but overall, because the US runs a trade surplus with the U.K. according to US data, there is perhaps this perception that the U.K., from a political point of view, won’t be embroiled in a trade war in the same sort of scale as the EU", said Jane Foley, head of FX strategy at Rabobank.
GBP/USD remained virtually unchanged during the Asian and early European trading sessions. Traders should continue observing developments around global trade tariffs. Also, two US macroeconomic releases may trigger extra volatility: ISM Manufacturing Purchasing Managers Index (PMI) and JOLTS Job Openings at 3:00 p.m. UTC. Higher-than-expected figures may push GBP/USD towards 1.28800. Conversely, lower-than-expected results may pull the pair above 1.29600.