Markets Eye Trade Tensions, Inflation as Gold Hits Record (03.14.2025)

Euro Weakens Against USD Ahead of Key Economic Data

The EUR/USD pair declined to around 1.0835 during Friday’s Asian session, as the Euro (EUR) weakened against the US Dollar (USD) amid rising trade tensions between the U.S. and the European Union. Later in the day, market focus will shift to key economic releases, including Germany’s February Harmonized Index of Consumer Prices (HICP) and the preliminary Michigan Consumer Sentiment Index for March.

Key resistance is at 1.0950, followed by 1.1000 and 1.1050. Support stands at 1.0800, with further levels at 1.0730 and 1.0650.   

Yen Slips Against USD as Tariff Concerns Increase the Dollar

The yen fell below 148 per dollar on Friday, reversing gains as trade tensions increased the dollar. Trump reaffirmed plans for reciprocal tariffs starting April 2. Despite this drop, the yen remains near a five-month high, backed by expectations of BOJ rate hikes. Japanese firms agreed to wage increases for a third year, aiming to offset inflation and labor shortages. Higher wages may spur spending and inflation, giving the BOJ room for future hikes. While rates are expected to remain unchanged next week, policymakers may pursue hikes later this year.

Key resistance is at 149.20, with further levels at 152.00 and 154.90. Support stands at 147.00, followed by 145.80 and 143.00. 

Gold Rallies Past $2,980 as Trade and Inflation Risks Mount

Gold surged above $2,980 per ounce on Friday, hitting a record high and poised for a 2% weekly gain amid risk aversion and rising Fed rate cut expectations. Trump escalated trade tensions, threatening a 200% tariff on European wines after the EU imposed a 50% tax on U.S. whiskey. February's PPI and CPI data signaled easing inflation, increasing Fed flexibility for rate cuts and boosting gold’s appeal. Strong ETF inflows and continued central bank purchases, with China extending its buying for a fourth month, further supported prices.

Key resistance stands at $2,985, with further levels at $3000 and $3,050. Support is at $2,930, followed by $2,900 and $2,860.   

Sterling Struggles Amid Risk Aversion and US Tariff Threats

GBP/USD extends its decline for the second consecutive session, hovering around 1.2940 during Friday's Asian trading hours. The currency pair faces difficulties as the Pound Sterling (GBP) weakens due to a negative risk sentiment, which has been further worsened by worries over global trade following US President Donald Trump's threat to impose a 200% tariff on European wines and champagne, creating market instability.

If GBP/USD breaks above 1.2980, the next resistance levels are 1.3050 and 1.3100. On the downside, support stands at 1.2860, with further levels at 1.2760 and 1.2660 if selling pressure increases.

Silver Holds Near $33.80 as Fed Rate Cut Bets Provide Support

Silver edged lower to approximately $33.80 during early Asian trading on Friday, losing momentum. However, the downside may remain limited, as softer U.S. consumer and producer inflation data could provide room for the Federal Reserve to consider an interest rate cut in June, offering some support for the metal.

Additionally, concerns over U.S. President Donald Trump's protectionist policies potentially pushing the world's largest economy into a recession could further support silver's appeal.

If silver breaks above $34.00, the next resistance levels are $34.85 and $35.00. On the downside, support is at $33.80, with further levels at $33.15 and $32.75 if selling pressure increases.