Gold Fell as Trade Tensions Eased
Gold (XAU/USD) fell by 1.74% on Wednesday after the announcement of a trade deal between the US and the U.K.
The announcement of the trade agreement gave some relief to global markets and eased investor concerns over escalating trade tensions. This development contributed to a more optimistic sentiment, reducing the demand for gold as a safe-haven asset, which typically benefits from geopolitical uncertainty. Meanwhile, the Federal Reserve (Fed) maintained its benchmark interest rate, aligning with market expectations. Also, the central bank issued a cautionary note regarding rising inflationary pressures and weakening labour market conditions. This reinforces the Fed’s measured and data-driven approach to future monetary policy decisions.
In his remarks, Fed Chair Jerome Powell clarified that the central bank isn’t considering pre-emptive rate cuts to counter potential economic risks from ongoing tariff disputes. His comments underscored the Fed’s commitment to balancing inflation control with support for economic growth without overreacting to near-term volatility. While gold prices faced downward pressure due to reduced safe-haven demand and steady interest rates, the metal has retained modest support. XAU/USD remains on track for a weekly gain, reflecting lingering investor caution in a complex macroeconomic environment.
XAU/USD remained relatively unchanged during the Asian and early European trading sessions. Today, the formal macroeconomic calendar is relatively uneventful, but traders should monitor any developments in US trade relations. Key levels to watch for XAU/USD are support at $3,195 and resistance at $3,435.
Euro Hits Four-Week Low
On Thursday, the euro (EUR/USD) fell by 0.65% due to the growth of the US dollar (USD). A trade deal between the US and the U.K. and the Federal Reserve (Fed) statements that it doesn’t plan to cut rates anytime soon supported USD.
"The market reaction of buying USD may reflect greater optimism that such tariff deals are doable", said Steve Englander, global head of G10 currency research at Standard Chartered, in a note to clients. "Trump’s dangling of the prospect of a trade détente with China may be adding to optimism that the global disruption from trade wars may not be as severe as markets have feared", he said. "For the time being, G10 markets would be relieved if US and China bilateral tariffs were rolled back, even if they remain well above 19 January levels".
EUR/USD remained essentially flat during the Asian and early European trading sessions. Although the official macroeconomic calendar is uneventful, traders should monitor any tariff-related news and negotiations, particularly with Japan. Key levels to watch are resistance at 1.13820 and support at 1.11890.
Bitcoin Hits $100,000 for the First Time in 3 Months
Bitcoin (BTC/USD) has increased by more than 6% against a backdrop of risk mitigation driven by concerns about the long-term economic impact of global tariffs.
"If changing tariff policies continue to drive a move away from US assets, Bitcoin could find its next leg higher", Geoff Kendrick, global head of digital asset research at Standard Chartered Bank, wrote in a note. "We expect a strategic asset reallocation away from US assets to trigger the next sharp upswing in bitcoin in the coming months", Kendrick said, noting he sees bitcoin hitting a new record high of around $120,000 in Q2 of 2025.
BTC/USD traded sideways during the Asian and early European trading sessions. No major news is expected today that could significantly influence price dynamics. Analysts project the price to continue moving within the established trend.