US dollar slipped against major peers, with EUR/USD and GBP/USD gaining 0.5% and 0.4% respectively
Stock markets experienced a dramatic drop before recovering
RBA remains optimistic on inflation targets
Forex Today: Gold Breaks $3,150 as Markets Await Trump Tariffs – 01 April 2025
April 1st, 2025 – In a day marked by heightened uncertainty and volatility, gold prices continued to soar, breaking through the psychological barrier of $3,150 per ounce. The rise in gold prices comes as markets remain jittery about the upcoming US tariff details, set to be released on Wednesday. Meanwhile, stock markets experienced a dramatic drop before recovering, fueling concerns about the overall health of the global economy.
Gold Prices Continue to Soar
The price of gold has been on an unprecedented tear this year, driven largely by concerns about global economic stability and the depreciating US dollar. As the world’s central banks continue to implement unconventional monetary policies, investors are seeking safer-haven assets like gold to hedge against potential market turmoil.
A rising gold price is often seen as a barometer of investor fear and uncertainty, said Alan Ruskin, Chief International Strategist at Deutsche Bank. As the tariffs situation continues to unfold, we expect gold to remain a key beneficiary of investor nervousness.
Soaring gold prices have significant implications for investors, particularly those with exposure to gold-producing stocks. Shares in companies like Barrick Gold, Newmont Goldcorp, and AngloGold Ashanti are all enjoying a strong run, with many analysts predicting further upside as the situation remains uncertain.
Stock Markets Seesaw
In a day marked by extreme volatility, stock markets around the world experienced a dramatic drop before recovering. The Dow Jones Industrial Average slid over 300 points in morning trading before bouncing back to finish the day flat.
The tech-heavy Nasdaq Composite also experienced a wild ride, falling over 1% before finishing the day up nearly 0.5%. The VIX volatility index, often referred to as the “fear gauge,” surged to its highest level since the US presidential election in 2016.
While the sudden drop in stock markets was attributed to the tariff uncertainty, some analysts believe that the broader market correction is long overdue. With valuations at historic highs, many investors are bracing for a potential pullback, although the exact timing remains unclear.
RBA Remains Optimistic on Inflation
In a rare moment of calm amidst the chaos, the Reserve Bank of Australia (RBA) delivered a dovish statement on inflation targets, reassuring investors that the central bank remains committed to achieving its 2.5% target.
The RBA’s inflation report, released earlier today, highlighted improving labor market trends and moderate consumer price growth. While the central bank acknowledged the ongoing trade tensions, it remained optimistic about the Australian economy’s prospects, citing the country’s strong construction sector and high levels of household savings.
The RBA’s sentiment should provide some respite for investors, particularly those with exposure to Australian assets. The AUD/USD currency pair, which had been trading near 13-month lows, extended its gains against the US dollar, closing up 0.3% at 0.7250.
What’s Next?
As markets await the release of US tariff details on Wednesday, investors would be wise to exercise caution. While the uncertainty surrounding the tariffs is unlikely to derail the global economy, it could have significant implications for individual companies and industries.
Gold prices, meanwhile, are likely to continue their upward trajectory, driven by concerns about global economic stability and the depreciating US dollar.
In the short term, investors should monitor the 3,180-3,200 level for gold, with a break above suggesting further upside potential. Conversely, a dip to 3,100-3,120 could provide a buying opportunity for longer-term investors.
