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What’s happening: Gold recorded gains on Friday, breaching the key $3,000 resistance level.
What happened: Investors continued to buy the safe-haven asset amid economic and geopolitical uncertainties due to US President Donald Trump’s latest moves.
The yellow metal has surged around 14% year to date, with growing tensions between the US and its allies.
Why it matters: Gold has been on an upward trend amid concerns over the impact of tariffs imposed by the Trump administration.
Although US President Donald Trump has managed to make Ukraine agree to a ceasefire deal, Russia is in the process of negotiating its wish-list.
Data released by the US on Friday showed the University of Michigan’s consumer sentiment index declining to 57.9 in March, from 64.7 in February. This marked the weakest reading in the index since November 2022.
Central banks around the world have continued to buy gold, lending support to prices. Goldman Sachs said that gold buying by central banks is expected to “remain structurally higher than before the freezing of Russian central bank reserves in 2022.”
Speculations of the US Federal Reserve cutting its benchmark interest rate by 25bps at its June meeting also sent gold prices higher.
Weakness in the US dollar lent 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 0.1% to 103.74 on Friday.
US gold futures climbed 0.3% to settle at $3,001.10 an ounce on Friday.
In other metals trading, silver closed higher at $34.433, while copper fell to $4.8960. Platinum settled at $1,013.2 and palladium at $973.40.
What to watch: Investors will continue monitoring Trump’s tariffs announcements, which are expected to significantly impact gold prices ahead. The performance of US dollar will also remain in focus.
Context: Equity markets in Europe closed higher on Friday, as investors welcomed news of Germany closing a historic debt deal.
Details: Germany’s soon-to-be chancellor, Friedrich Merz, announced that he had reached a deal with the Green and Social Democrat parties for a massive increase in state spending.
The agreement is expected to be approved by the outgoing parliament next week, which includes a €500 billion fund for infrastructure.
Stocks of European banks and industrial goods rose the most following the news. The continent-wide aerospace and defence index closed 4.1% higher.
Meanwhile, growing trade concerns continued to impact market sentiment after US President Donald Trump warned to impose a tariff of 200% on all wines and other alcoholic beverages from the European Union.
The STOXX Europe 600 Index gained 1.14% to close at 546.60 on Friday. London’s FTSE 100 surged 1.05% to 8,632.33, while Germany’s DAX 40 and France’s CAC 40 added 1.86% and 1.13%, respectively.
What to watch: Investors await the release of economic data on Eurozone’s balance of trade (1400 UAE Time) and ZEW economic sentiment index (1400 UAE Time) on Tuesday. The Eurozone, which recorded a trade surplus of €15.5 million in December, is expected to report a surplus of €14.1 billion in January.
The ZEW indicator of economic sentiment for the Eurozone, which rose by 6.2 point from the previous month to a reading of 24.2 in February, is projected to surge to 39.6 in March.
Other Markets: US trading indices closed higher on Friday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 1.65%, 2.13% and 2.49%, respectively.
In a message to both Russia and Ukraine, Indian Prime Minister Narendra Modi advised that battlefield victories would not lead to a lasting resolution. The news sent the RUB/USD higher in forex trading this morning.
New Zealand’s BusinessNZ Performance of Services Index fell to 49.1 in February, from 50.4 in January. The services sector slipping into the contraction zone exerted pressure on the NZD/USD forex pair.
Singapore’s trade surplus grew to S$6,159 million in February, from S$3,040 million in the previous month. The figure coming in significantly higher than market expectations sent the SGD/USD pair higher in forex trading this morning.
China’s retail sales grew by 4.0% year-on-year in the first two months of 2025, accelerating from 3.7% in December, lending support to the CYN/USD forex pair.
Indonesia’s trade surplus surged to $3.12 billion in February, from $0.83 billion a year earlier. The figure exceeding market expectations of $2.45 billion sent the IDR/USD pair higher in forex trading this morning.
Italy’s inflation rate (1300 UAE Time), Spain’s balance of trade (1300 UAE Time), South Africa’s inflation expectations (1330 UAE Time), Brazil’s IBC-BR economic activity (1600 UAE Time), Canada’s housing starts (1615 UAE Time) and foreign securities purchases (1630 UAE Time), as well as US retail sales (1630 UAE Time), NY Empire State manufacturing index (1630 UAE Time), business inventories (1800 UAE Time), NAHB housing market index (1800 UAE Time), 3-month bill auction (1930 UAE Time) and 6-Month bill auction (1930 UAE Time).
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