Safe-Haven Demand Pushes Gold Higher and Higher
The gold ( XAU/USD ) price surged by 1.22% on Thursday and set a new all-time high. Investors fled to the safe-haven asset amidst rising global trade tensions and falling equity markets triggered by US President Donald Trump’s new auto tariffs.
Donald Trump announced that the US will impose an additional 25% tariff on imports of vehicles starting at 4:01 a.m. UTC on 3 April. Other countries—specifically Canada and France—immediately threatened to retaliate.
"We will fight the US tariffs with retaliatory trade actions of our own that will have maximum impact in the United States and minimum impacts here in Canada", Canadian Prime Minister Mark Carney said at a news conference.
Eric Lombard, French Finance Minister, called Trump’s plan ’very bad news’, and said the only solution was for the European Union (EU) to raise its own tariffs. In response, Trump said he might hit the EU and Canada with larger tariffs if they teamed up to retaliate.
Overall, global trade tensions are rising rapidly. Investors turn to gold as a traditional safe-haven asset, seeking to mitigate the potential risks associated with volatile equity markets and global macroeconomic uncertainty. Thus, the gold price rises towards new heights as investors prioritise capital preservation over higher-risk investments.
"Looks like we’re going to see gold futures hit $3,100 here shortly, and the main catalyst is safe-haven buying", said Bob Haberkorn, senior market strategist at RJO Futures.
Goldman Sachs, a major investment bank, raised its end-2025 gold price forecast towards $3,300, up from $3,100. The main drivers for the rise are stronger-than-expected inflows into exchange-traded funds (ETFs) and sustained central bank demand.
XAU/USD continued to rise during the Asian and early European trading sessions, hitting another all-time high. Investors are now awaiting the US Personal Consumption Expenditures (PCE) data due at 12:30 p.m. UTC to get clues on the Federal Reserve’s ( Fed ) further actions. However, any news around trade tariffs will likely overshadow official inflation statistics. XAU/USD remains in a very strong bullish trend, with traders now targeting $3,096 and $3,114.
US Tariffs Put Bearish Pressure on Euro
The euro ( EUR/USD ) gained 0.46% against the US dollar (USD) on Thursday, indicating a technical rebound from a very strong support level.
EUR/USD tested its 200-day moving average yesterday but found support, prompting short-term buying as traders interpreted the level’s resilience as a bullish signal.
The US Dollar Index (DXY) is now experiencing downward pressure, reflecting uncertainty about the potential impact of new US trade tariffs expected next week. Initial optimism regarding potential flexibility in US President Donald Trump’s tariff decisions spurred risk appetite and strengthened the US dollar earlier this week. However, market participants remain cautious as they await his 2 April announcement on automobile tariffs. Eurozone equity indices, specifically the shares of automakers like Volkswagen, plunged to multi-week lows, indicating a damaged investors’ confidence. Heightened concerns about potential trade barriers and their direct impact on the export-heavy automotive sector is a crucial component of the eurozone’s economy, pressuring the euro.
"The US has chosen a path at whose end lie only losers since tariffs and isolation hurt prosperity for everyone", German Chancellor Olaf Scholz said.
Fundamentally, EUR/USD remains under bearish pressure as the eurozone economy is already struggling with elevated energy costs and faces the risk of higher trade tariffs. Money markets currently price in a 38% chance that the European Central Bank (ECB) will cut its base rate to 2% by the end of 2025. This outlook is more dovish than the Federal Reserve’s (Fed) expected monetary policy.
EUR/USD fell during the Asian and early European trading sessions. Today, traders should watch out for any new developments around trade tariffs. In addition, the US Personal Consumption Expenditure (PCE) Price Index will come out at 12:30 p.m. UTC and may spur some extra volatility. The market expects a 0.3% rise in the monthly core PCE and a 2.7% annual increase. Higher-than-expected figures will likely push EUR/USD towards 1.07500. Conversely, lower-than-expected results may pull the pair higher towards 1.08360.
Bitcoin Declines, Following Major US Indices
The Bitcoin (BTC) price dropped by 1.2% on Thursday but remained above the important 200-day moving average.
Bitcoin is a risk-sensitive asset that closely tracks the performance of equity indices, specifically Nasdaq . US President Donald Trump’s decision to impose 25% tariffs on imported cars and light trucks triggered a decrease in all major US stock indexes on Thursday, with automakers experiencing significant declines. The risk of an escalating global trade war has further poisoned investors’ sentiment, pushing BTC/USD and other crypto coins down. The negative correlation between BTC/USD and XAU/USD during periods of heightened uncertainty shows a divergence from the narrative that Bitcoin should function as ’digital gold’. This suggests that, rather than acting as a safe-haven asset mirroring gold’s moves, Bitcoin’s price exhibits a distinct and often opposite reaction to market anxieties.
BTC/USD fell during the Asian and early European trading sessions. Traders should prepare for increased volatility later today as Bitcoin options contracts, with about $12.14 billion in notional value, will expire today. In addition, the US Personal Consumption Expenditure (PCE) Price Index report is due at 12:30 p.m. UTC. The data may spur some extra volatility, as it will shed light on future changes in US interest rates. The market expects a 0.3% rise in the monthly core PCE Price Index and a 2.7% annual increase. Higher-than-expected figures will likely push BTC/USD towards $84,900. Lower-than-expected results may pull the pair up towards $87,000.