Articles

Fundamental
Overview

Gold has been on a steady
uptrend lately as traders have been finding shelter in the precious metal amid
stagflationary risks. In fact, we are seeing inflation expectations rising
while growth forecasts get revised lower.

Last Friday, we got some
more bad news as the final University of Michigan survey showed consumer
sentiment slumping even more than preliminary report and long-term inflation
expectations got revised higher.

The spike overnight came
after the WSJ report saying that Trump is weighing
broader and higher tariffs with hikes potentially going up to 20%.

In the bigger picture, as
long as the Fed doesn’t change its reaction function and doesn’t consider rate
hikes, the trend should remain to the upside as real yields will continue to
fall amid the stagflationary pricing.

Gold
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that gold rallied into yet another all-time high as traders continue to
flock into the precious metal. From a risk management perspective, the buyers
will have a better risk to reward setup around the major trendline to position for further upside. The
sellers, on the other hand, will want to see the price breaking below the
trendline to start targeting a deeper correction into the 2832 level.

Gold Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor upward trendline defining the bullish momentum. If we
were to get a pullback into the trendline, we can expect the buyers to lean on
it with a defined risk below it to position for a rally into new highs. The
sellers, on the other hand, will want to see the price breaking lower to pile
in for a drop into the next major trendline.

Gold Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can
see that we have yet another minor upward trendline. As the fundamentals
continue to favour the upside, the buyers will look for every dip-buying
opportunity to position for further upside. Right now, the price is struggling
to extend into new highs as we reached the upper bound of the average daily range for today.

If we get a pullback into
the trendline, we can expect the buyers to step in to position for new highs,
while the sellers will look for a break lower to extend the pullback into the
next trendline.

Upcoming
Catalysts

Tomorrow we get the US Job Openings and the
US ISM Manufacturing PMI. On Wednesday, we have the US ADP and the unveiling of
the US reciprocal tariffs plan. On Thursday, we get the US ISM Services PMI and
the latest US Jobless Claims figures. On Friday, we conclude the week with the
US NFP report and Fed Chair Powell speech

This article was written by Giuseppe Dellamotta at www.forexlive.com.

They’re now expecting another 25 bps rate cut before the summer break kicks in, following the latest developments. Last week, we did get softer inflation readings from France and Spain. That’s helping with the narrative alongside likely a softer growth outlook amid Trump’s tariffs coming up later this week.

Goldman also revised their forecast for the Fed earlier here.

This article was written by Justin Low at www.forexlive.com.

That sees USD/JPY undo its advance from last week as it now falls to below 149.00, down 0.7% on the day. This comes as bonds are keeping bid amid the more defensive risk mood in markets. 10-year Treasury yields are down nearly 7 bps to 4.184%. That is nearly its lowest levels in three weeks.

It’s all about Trump tariffs and for now, markets are cowering in fear ahead of Liberation Day on 2 April.

While there was some hope last week that Trump may look towards a more targeted approach on tariffs, that has been dashed in the new week now following this report here. This is igniting recession fears and further uncertainty on the global economy.

So far, other major currencies are not showing all too much change. The dollar is keeping steadier across the board but it is the Japanese yen that is holding more of a bid today, owing to the fall in bond yields.

This article was written by Justin Low at www.forexlive.com.

As we get into the new day, broader markets are fearing that Trump might not be taking a targeted approach on tariffs come 2 April. That follows from this latest report here. Liberation Day is set to be the most important event in markets this week as we will get an idea of what sort of trade policies and tariffs that Trump wants to dish out.

That being said, it’s not going to be the only thing that could move markets this week. Let’s take a step back and weigh the other things in play in the next few days.

The first one is obviously the US jobs report on Friday. The non-farm payrolls report is going to be a notable one, with estimates showing an expected slowdown in employment growth to 128k in March – down from 151k in February.

But as was the case last month, the big thing to watch is how much impact from DOGE-related layoffs will show up in the data. That’s still an interesting quandary that could sway broader markets depending on what we see from the numbers at the end of this week.

Besides that, we also will have Eurozone inflation numbers tomorrow. And teeing that up will be the German inflation numbers today. The market pricing has grown increasingly convinced that the ECB will cut rates in April. That is of course largely thanks to Trump’s tariffs, with the latest one on German autos especially being a standout.

So, the inflation figures tomorrow could seal the deal on a rate cut. But the medium-term outlook for the ECB is definitely going to be more complicated in the months ahead. Germany’s spending package has the potential to stir up inflation and that’s something the central bank has to watch out for going into next year.

For now, the immediate focus will be quite straightforward. However, it doesn’t mean that the ECB will have an easy path following the likely rate cut in April.

Sticking with central banks, there’s also the RBA monetary policy decision tomorrow to work through. Traders are not expecting a rate cut just yet but this latest shocker in terms of labour market data has definitely raised the odds of a less hawkish tone by the central bank.

The RBA delivered a hawkish cut in February here but it looks like they might have to change their tone now before moving into May.

This article was written by Justin Low at www.forexlive.com.

As the focus turns towards Trump tariffs later in the week, the gold train is not stopping to kick start proceedings. The precious metal broke the $3,100 level earlier and is now up over 1% to a fresh record high of $3,121.

In a time like this, it’s hard to find reasons not to like gold. The amount of economic and political uncertainty, coupled with major central banks poised to cut rates further, and also central banks propping up demand as they are also buying up the precious metal. The fundamentals are all still very much supportive.

The question now for gold is the same as what broader markets are going to be dealing all through the week. Are Trump’s tariffs going to be significant come what may and are they going to be a cause for a recession and a major global slowdown?

If the answer is yes, expect gold to keep ripping higher as emotions start running in response to the tariffs on 2 April. If not, there’s likely scope for a strong pullback considering the run higher we’re seeing since the end of last week.

This article was written by Justin Low at www.forexlive.com.

• Prior +0.2%; revised to +0.7%

That’s a strong beat on estimates with an upwards revision to January to boot. It points to a good start to the new year for German retail spending, after a more disappointing holiday period at the end of last year. Looking at the breakdown, food store sales were seen up 0.8% on the month while non-food retail sales were seen up 0.6% on the month. This is most certainly a welcome development for the German economy to kick start the 2025 year.

This article was written by Justin Low at www.forexlive.com.

• Prior +1.1%

In annual terms, import prices were seen up 3.6% in February and that’s the highest year-on-year increase since January 2023. Looking at the monthly breakdown, there were increases in prices for consumer goods (+0.3%) and intermediate goods (+0.5%). The prices for capital goods were unchanged compared to January. And excluding energy prices, import prices were also seen up 0.3% on the month.

This article was written by Justin Low at www.forexlive.com.

Tech shares are leading the declines with Nasdaq futures also marked down by 1.1% currently. In case you missed it: Trump weighs broader, higher tariffs. Across-the-board hike of up to 20% considered

The 2 April deadline draws closer and Trump will surely want to make a show of it, having already labelled it as Liberation Day. It’s going to be a tricky next few days and it’s also important to consider this: What is really expected by the market for reciprocal tariffs: 5 ways to look at it

As things stand, risk sentiment is likely to stay on edge until we get to the big day. But come what may, it’s important to remember that markets will react however they want to react. And it’s not about what we, as traders, think is right or believing what markets should do.

The reception by broader markets can be however rational or irrational, but at the end that is what drives price movements.

And that’s something we have to accept in order to find pockets of opportunities this week. One might be right in arguing how significant or insignificant the impact of Trump’s tariffs might be but in the next few days, the market reaction i.e. emotional response will outweigh all of that until the dust settles.

This article was written by Justin Low at www.forexlive.com.

This is fitting as they also see a higher chance of a recession ahead of what’s coming from Trump’s tariffs on 2 April. So, expecting a more dovish Fed in response plays into their overall outlook/narrative.

This article was written by Justin Low at www.forexlive.com.

Just a reminder as daylight savings have kicked into gear in Europe over the weekend. For those unaffected by the change, it means that European markets and data releases will be an hour earlier than before. And this will continue until the final Sunday of October. Daylight savings have long been a controversial agenda in Europe but it looks like it is here to stay for some time yet.

This article was written by Justin Low at www.forexlive.com.

German inflation continues to be a bit of a sticking point for the ECB since last year. While headline annual inflation continues to keep closer to 2%, it is still taking some time for core prices to converge towards the target. In February, the latter was seen at 2.7%. That still showed some easing from January but it’s still not quite there yet.

The estimate today is for headline annual inflation to ease a touch to 2.2%, down from 2.3% in February. But as per before, it’s all about the core reading when it comes to taking stock of German price pressures. So, that will be the main focus point still.

The government’s €500 billion spending plans are not likely to impact price pressures all too immediately. So, that shouldn’t show up in the short-term at least. But it does have the potential to stoke the flames of inflation in the medium-term, depending on productivity and other economic dynamics. And that’s something the ECB has to be wary about as well.

Here’s the agenda for today:

• 0800 GMT – North Rhine Westphalia
• 0800 GMT – Hesse
• 0800 GMT – Bavaria
• 0800 GMT – Baden Wuerttemberg
• 0800 GMT – Saxony
• 1200 GMT – Germany national preliminary figures

Do note that the releases don’t exactly follow the schedule at times and may be released a little earlier or later.

This article was written by Justin Low at www.forexlive.com.

• “Trump’s tariff regime will be more disruptive to global economy than markets are pricing”
• China says that it has discovered a major oilfield in the eastern South China Sea
• Reserve Bank of Australia should cut now – “Global Economic Outlook Goes Into a Tailspin”
• Nasdaq Futures Analysis by tradeCompass
• Gold to a record high above US$3100
• China – Nanjing has lifted home purchase limits starting March 31
• Weekend: Trump revoked permits and waivers allowing Western firms to operate in Venezuela
• Musk says no plans for the US government to use DOGE coin
• Japan’s Finance Minister Kato says excessive moves on forex are undesirable
• China March official Manufacturing PMI 50.5 (expected of 50.5)
• CBA expects RBA on hold this week, with a more dovish tone
• PBOC sets USD/ CNY reference rate for today at 7.1782 (vs. estimate at 7.2593)
• Australia Private Sector Credit February 2025 +0.5% m/m (expected +0.5%, prior +0.5%)
• Japan government official says output higher not due to tariff front running
• Australian March private inflation survey +0.7% m/m (prior -0.2%) & 2.8% y/y (2.2% prior)
• New Zealand March business confidence 57.5 (prior 58.4)
• Japan February Industrial Output (preliminary) +2.5% m/m (expected +2.3%, prior -1.1%)
• Japan data – February retail sales +1.4% y/y (expected +2.0%, prior +4.4%)
• Trump says not putting on oil sanctions right now
• Trump weighs broader, higher tariffs. Across-the-board hike of up to 20% considered.
• UK business confidence held steady in March, matching February’s six-month high
• People’s Bank of China punishes two who spread false info about interest-rate cuts
• Trump is planning to travel to Saudi Arabia in mid-May
• Globex is open for the new week – US equity index futures lower
• Goldman Sachs says 35% chance of recession (from 20%) in 12 months
• US news – Republican Party headquarters in Albuquerque firebombed with Molotov Cocktail
• China injects $69 billion into state banks to bolster economy
• Japan planning to officially recognize crypto assets as financial products – Nikkei report
• Trump said he is annoyed with Putin, threatens ‘secondary tariffs’ on Russian oil
• Trade ideas thread – Monday, 31 March, insightful charts, technical analysis, ideas
• Monday morning open levels – indicative forex prices – 31 March 2025
• The Fed put and the Trump put may both be gone
• Nomura: Beijing’s cautious tariff response is pragmatic amid limited import alternatives
• Elon Musk sells Twitter to xAI
• Forexlive Americas FX news wrap: US dollar slides despite risk rout. Another gold record

Markets
in Asia were always going to be on edge after the huge slide on Wall
Street on Friday. Equities got a further shove lower as
renewed tariff threats from Trump shook investor confidence and
prompted a sharp reassessment of economic risks. Trump said he plans
to launch his reciprocal tariff push against “all countries,”
reinforcing expectations of a sweeping trade crackdown that could see
levies of up to 20% imposed on nearly all U.S. trading partners.
While the precise scope remains undecided (with two days to go still
undecided … hard to believe), administration insiders say the final
policy will be “big and simple,” likely broader than earlier
plans targeting just top trading partners.

Goldman
Sachs responded by lifting its 12-month U.S. recession probability to
35%, up from 20% previously, citing higher inflation, higher
unemployment, and associated growth-dampening risks of a broad-based
tariff regime. The last time recession odds were this high was during
the aggressive Fed tightening cycle in 2022 and the SVB-related
turmoil of early 2023. We didn’t get recessions those times,
fingers crossed the luck holds out.

In
Asian data, Japan’s industrial production surged at its fastest
pace in nearly a year as manufacturers rushed to fill orders ahead of
expected U.S. tariff hikes. Meanwhile, China’s official PMI showed
manufacturing activity accelerating to a 12-month high in March,
buoyed by strong domestic demand and front-loaded export orders.
Still, Capital Economics noted that overall growth momentum remains
uneven, with continued softness in the services sector (despite the PMI expanding).

In other news from China, Nanjing, the capital of East China’s Jiangsu Province,
removed all home purchase restrictions.

In
Australia, an uptick in (a private survey of) monthly inflation data reversed February’s
softness, tempering market hopes that price pressures might soon fall
comfortably back within the RBA’s target band. The data may prompt RBA policymakers to remain cautious about further easing. The Bank makes
its interest rate decision Tuesday Australia time, with markets
almost unanimously expecting an on hold decision.

Elsewhere,
a new report from The
Information
revealed that some tech firms are beginning to scale back AI spending
sharply, citing cost efficiencies from platforms like DeepSeek,
adding a fresh wrinkle to the AI investment narrative.

In
FX markets yen was a notable mover, with USD/JPY dropping under 149.00
again. Safe haven demand in the face of geopolitical stress alongside
tariff chaos, and lower US yields contributing. Speaking of a safe
haven, gold rocketed even higher, to a record high above US$3110.

EUR,
GBP were both up a little while AUD and NZD are more or less flat.

Equities
were hit:

• Shenzen
  down more than 1%
• ChiNext
  down more than 1%
• Shanghai
  Composite down 0.6%
• Hong
  Kong’s Hang Seng -1.3%
• Japan’s
  Nikkei -4% (3.9 as I update to be more precise)
• US
  equity futures -0.7%

USD/JPY:

This article was written by Eamonn Sheridan at www.forexlive.com.