Dollar Weakens, Gold Records on Rate Bets (04.11.2025)

Global trade policy shifts dominated markets as the euro surged past $1.13 after the EU suspended U.S. tariffs for 90 days, while the yen hit a six-month high on safe-haven demand.

Gold soared to a record above $3,200 amid recession fears and Fed rate cut expectations, and silver followed, boosted by tariff-related uncertainty. Meanwhile, the pound climbed to $1.30 as dollar weakness persisted, but cautious BoE rate cut bets and slow UK growth projections kept gains limited.

EU Tariff Relief Drives Euro Above $1.13

The euro climbed above $1.13, its highest since September 2024, after the EU suspended new U.S. tariffs for 90 days to allow trade talks. This followed President Trump’s move to cut tariffs to 10% for non-retaliating countries while raising Chinese duties to 125%. While easing global slowdown fears, the mixed signals fueled uncertainty. Money markets adjusted ECB expectations, pricing the deposit rate at 1.8% by December, up from 1.65%, and lowered the probability of an April cut to 90%.

Key resistance is at 1.1390, followed by 1.1425 and 1.1500. Support lies at 1.1260, then 1.1180, and 1.1100.

Yen Gains on Recession Fears

The yen rose past 144 per dollar, a six-month high, as U.S. recession fears and a Treasury selloff boosted demand for safe-haven assets. Although Trump paused new tariffs for 90 days, total U.S. tariffs on China now stand at 145%, prompting retaliation with China imposing 84% tariffs on U.S. goods. The U.S.-Japan trade outlook remains in focus, with Japan still facing a 10% U.S. tariff but seeking better terms.

Key resistance is at 145.80, with further levels at 148.00 and 152.70. Support stands at 142.00, followed by 139.65 and 138.00.

Gold Surges, Hits Record Above $3,200

Gold spiked to a new record above $3,200 per ounce on Friday, driven by safe-haven demand and a weakening dollar amid intensifying U.S.-China trade tensions. The U.S. hiked tariffs on China to 145%, while easing duties for other partners. At the same time, U.S. consumer prices unexpectedly fell in March, fueling bets on a Fed rate cut in June and a full percentage point cut by year-end. Despite this, inflation risks remain due to ongoing tariff pressure. Gold is set for its strongest weekly gain since November.

Key resistance is at $3,250, followed by $3,300 and $3,350. Support stands at $3165, then $3135 and $3090.

Pound Gains on Dollar Softening, GBP/USD at $1.30

The pound extended gains to $1.30 for a third session, as the dollar softened following Trump’s 90-day tariff pause for most countries. However, the 145% hike on Chinese goods kept risks elevated. While volatility persists, traders now expect 66 bps of BoE rate cuts this year, down from 79 bps a day earlier. UK GDP is forecast to grow 0.1% in February, suggesting a slow recovery.

If GBP/USD breaks above 1.3050, resistance levels are at 1.3100 and 1.3200. Support is at 1.2960, followed by 1.2900 and 1.2850.

XAG/USD Climbs on FOMC Worries

Silver prices climbed above $31 per ounce on Thursday, extending gains for a second straight session as commodities rebounded following President Trump’s rollback of his reciprocal tariff policy. The new measure lowers tariffs on most trade partners to 10% for 90 days to support negotiations. However, China, a key silver consumer, still faces a steep 125% tariff, keeping geopolitical tensions elevated and sustaining safe-haven demand. Meanwhile, FOMC minutes revealed growing concerns about stagflation and the impact of Trump’s trade agenda on the Fed’s dual mandate of price stability and full employment.

Resistance starts at 31.50; if breached, the next levels are 32.15 and 33.30. Support sits at 30.20, with 29.50 and 29.20 below if that level gives way.