Gold dips as Trump threatens to escalate strikes

Today’s headlines

What’s happening: Gold prices fell this morning as investors assessed the latest comments from US President Donald Trump.

What happened: The US President threatened strikes on Iran’s power plants and civilian infrastructure in case the Strait of Hormuz is not reopened.

Strength in the US dollar and hopes of a 45-day ceasefire weighed on gold prices.

Why it matters: The ongoing Middle East conflict has now entered its sixth week, significantly impacting global markets due to surging energy prices with Iran keeping the Strait of Hormuz closed.

Markets remain uncertain, with Trump’s comments oscillating from asking troops to leave Iran to threatening severe strikes on Iran’s infrastructure. After extending his deadline from 48 hours to 10 days, Trump said last week that troops would leave, even if no deal is reached. The US President then warned of severe strikes on Iran over the next two to three weeks, including potential strikes on civilian infrastructure in case no deal is reached.

On Sunday, Trump issued a renewed ultimatum to Tehran, warning of strikes in case the Strait of Hormuz is not reopened. “Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!!” Trump wrote on social media.

He also set a new deadline for Tuesday at 8 pm ET, while signalling plans to hold a news conference at 1 pm ET on Monday.

Meanwhile, there were reports of the US, Iran and a group of regional mediators being engaged in discussions over the terms of a potential 45-day ceasefire.

Gold has declined by around 12% since the start of the Middle East conflict, as higher energy prices raised inflation concerns and increased prospects of the Federal Reserve hiking interest rates this year. This supported the US dollar, exerting pressure on the yellow metal.

Strength in the US dollar continued to weigh on gold prices this morning, as a higher greenback makes commodities more expensive for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose more than 0.2% to 100.26 this morning.

Spot prices for gold fell 1.1% to $4,625.93 an ounce this morning.

In other metals trading, spot silver prices declined 1.5% to $71.8935 an ounce, platinum declined 0.6% to $1,980.69 and palladium slipped 0.2% to $1,505.02.

What to watch: Investors will keep an eye on comments from Trump around the Middle East conflict.

The markets today

The Canadian dollar in focus today ahead of some major economic reports

Context: The Canadian dollar rose against the US dollar this morning as investors monitored the Bank of Canada’s monetary policy outlook.

Details: Data released on Thursday showed that Canada’s trade deficit widened to C$5.7 billion in February from C$4.2 billion in the previous month. The figure came in worse than market estimates of C$2.3 billion. This signalled the widest trade deficit since August 2025, as total imports rose 8.4% to a record high of C$72.1 billion.

Canada’s trade surplus with the US narrowed to C$1.7 billion, the lowest since May 2020, as imports rose 13.6% and exports grew by 4.4% during the period.

Last month, the Bank of Canada maintained its benchmark interest rate at 2.25%. The central bank is expected to keep interest rates unchanged in April, while investors are expecting two quarter-point increases by the end of the year.

Lower prices of crude oil, one of Canada’s major exports, exerted pressure on the loonie. Spot prices of WTI crude oil fell around 0.5% to trade at $111.90 per barrel this morning.

Strength in the US dollar also weighed on Canadian currency this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained more than 0.2% to 100.26.

The USD/CAD pair fell slightly to 1.3940 this morning. The loonie lost around 2% in March, recording its steepest monthly plunge since December 2024.

What to watch: Investors will continue monitoring the ongoing Middle East war.

Data on S&P Global composite PMI (1730 UAE Time) and S&P Global services PMI (1730 UAE Time) will be released today. The S&P Global Canada composite PMI, which rose to 47.1 in February from 46.4 in the previous month, is expected to climb further to 47.5 in March. Analysts expect the S&P Global services PMI to rise to 48 in March from 46.5 in February.

Other Markets: Asian indices traded mixed this morning, with Hong Kong’s Hang Seng and China’s Shanghai Composite down by 0.7% and 1%, respectively, and Japan’s Nikkei 225 up by 1.4%.

The news shaping the markets

Russian attacks killed at least 15 persons and left dozens injured across Ukraine, as President Volodymyr Zelenskyy held discussions with Turkiye’s Recep Tayyip Erdogan. The news sent the USD/RUB pair lower in forex trading this morning.

Singapore’s S&P Global PMI slipped to 56.7 in March from 59.2 in the previous month. The latest reading signalling a 14th consecutive month of expansion in private sector activity exerted pressure on the USD/SGD forex pair.

Vietnam posted a trade deficit of $0.67 billion in March versus a surplus of $1.70 billion in the year-ago month, which sent the USD/VND pair higher in forex trading this morning.

South Korea’s foreign direct investment jumped 82.9% year-over-year to a record $7.14 billion in the first quarter, exerting pressure on the USD/KRW forex pair.

Saudi Arabia’s Riyad Bank PMI fell to 48.8 in March from 56.1 in the previous month. However, the USD/SAR pair declined slightly in forex trading this morning.

What else to watch today

Mexico’s gross fixed investment (1600 UAE Time), Brazil’s S&P Global services PMI (1700 UAE Time) and S&P Global composite PMI (1700 UAE Time) as well as US ISM services PMI (1800 UAE Time), ISM services employment (1800 UAE Time), ISM services new orders (1800 UAE Time) and ISM services prices (1800 UAE Time).