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What’s happening: Gold prices surged to record highs on Wednesday, following another tariff announcement by US President Donald Trump.
What happened: Trump announced reciprocal tariffs on several nations, sparking renewed speculations of a trade war, boosting the appeal of the safe-haven bullion.
Weakness in the US dollar lent further support to the yellow metal during Wednesday’s session.
Why it matters: The US President announced a 10% baseline tariff on imports from all nations and disclosed increased rates for countries with trade surpluses. He presented a chart displaying tariffs, which included a 34% tariff on China, 24% on Japan, 20% on the European Union and a 25% tariff on foreign-made vehicles.
Trump said that these measures would provide a boost to domestic manufacturing and result in lower trade deficits. These tariffs are expected to escalate a trade war that Trump kicked off after returning to the White House in January this year.
Gold prices received further support from prospects of interest rate cuts, increased buying from central banks and higher demand for gold-backed ETFs.
Weakness in the US dollar also provided support to gold prices, as a lower greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.4% following the announcement of Trump’s latest tariff plans.
Meanwhile, data released by the ADP on Wednesday showed private businesses in the US added 155,000 jobs in March, following 84,000 job adds in February. The figure also came in higher than market projections of 105,000.
Gold has surged more than $500 so far this year, with investors preferring the yellow metal during uncertain times. WTI gold futures gained 0.6% to settle at $3,166.20 an ounce on Wednesday.
In other metals trading, silver surged to $34.65 an ounce, platinum settled higher at $995.20 and palladium closed at $985.30.
What to watch: Downbeat jobs and manufacturing data from the US would now shift investor focus to the NFP (nonfarm payrolls) report, due this Friday. The US economy, which added 151,000 jobs in February, is expected to add 140,000 jobs in March, while the unemployment rate is projected to remain at 4.1%.
Context: The CAD/USD forex pair edged lower this morning following tariff announcements by the US.
Details: Trump announced plans to impose a 25% tariff on all foreign-made vehicles, which is expected to significantly impact Canada’s auto sector.
Meanwhile, data released earlier this week showed the S&P Global Canada manufacturing PMI declined to 46.3 in March, from 47.8 in the previous month. The region’s manufacturing activity contracted the most since December 2023.
Lower prices of crude oil, one of Canada’s major exports, exerted pressure on the loonie. WTI crude oil prices dipped 2.7% to $69.80 a barrel this morning.
However, weakness in the US dollar lent some support to the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.7% this morning.
The CAD/USD declined by around 0.1% to 1.4249 this morning. The S&P/TSX Composite Index surged 1.09% to close at 25,307.18 on Wednesday.
What to watch: Investors await the release of economic data on Canada’s balance of trade (1630 UAE Time), S&P Global composite PMI (1730 UAE Time) and S&P Global services PMI (1730 UAE Time) today. The Canadian trade surplus, which widened to C$4.0 billion in January, the largest since May 2022, is expected to shrink to C$3.4 billion in February.
Analysts expect the S&P Global Canada services PMI to decline to 46 in March, from 46.6 in February, while composite PMI is projected to fall to 46 in March, from 46.8 in the previous month.
Other Markets: US trading indices closed higher on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.56%, 0.67% and 0.75%, respectively.
Russia’s President Vladimir Putin plans to send his top negotiator, Kirill Dmitriev, to Washington after US President Donald Trump expressed his dissatisfaction with the terms of the ceasefire. The news sent the RUB/USD pair slightly higher in forex trading this morning.
Singapore’s S&P Global PMI rose to 52.7 in March, from 51.0 in the previous month. The latest reading signalled an expansion in the private sector for the second consecutive month, lending support to the SGD/USD forex pair.
Japan’s Au Jibun Bank services PMI was revised higher to 50 in March, from a flash reading of 49.5, sending the JPY/USD pair higher in forex trading this morning.
Australia’s trade surplus on goods shrank to A$2.97 billion in February, from A$5.16 billion in the previous month. The region recording the smallest trade surplus since August 2023 exerted pressure on the AUD/USD forex pair.
Ireland’s AIB services PMI rose to 55.3 in March, from 53.2 in the previous month. The recent reading signalled the fastest expansion in services activity since December 2024, sending the EUR/USD pair higher in forex trading this morning.
Eurozone’s HCOB composite PMI (1200 UAE Time), HCOB services PMI (1200 UAE Time) and PPI (1300 UAE Time), UK’s S&P Global composite PMI (1230 UAE Time) and S&P Global services PMI (1230 UAE Time), Turkey’s foreign exchange reserves (1530 UAE Time), US Challenger job cuts (1530 UAE Time), balance of trade (1630 UAE Time), initial jobless claims (1630 UAE Time), continuing jobless claims (1630 UAE Time), S&P Global composite PMI (1745 UAE Time), S&P Global services PMI (1745 UAE Time), ISM services PMI (1800 UAE Time) and EIA natural gas stocks change (1830 UAE Time), Mexico’s gross fixed investment (1600 UAE Time), Brazil’s S&P Global services PMI (1700 UAE Time), S&P Global composite PMI (1700 UAE Time), as well as Argentina’s tax revenue (2300 UAE Time).
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