Markets Mixed Ahead of Fed: Gold Up, Euro Down (05.06.2025)

The euro slipped to $1.1315 on Tuesday, pressured by dollar strength ahead of the Federal Reserve’s rate decision. The yen also weakened toward 144, while gold surged to nearly $3,360 as renewed tariff threats increased safe-haven demand. 

Sterling dipped to $1.3265, awaiting both Fed and Bank of England policy updates. Silver remained steady at nearly $33 as global uncertainty persisted.

Euro Pressured Ahead of Fed Decision

The euro is trading around $1.1315 on Tuesday, pressured by a stronger U.S. dollar ahead of the Federal Reserve’s policy decision, where rates are expected to remain unchanged. However, the dollar still faces headwinds from doubts over its safe-haven appeal and President Trump’s unpredictable tariff stance. A dovish Fed or continued skepticism toward the dollar may limit euro losses.

Resistance levels are seen at 1.1460, then 1.1580 and 1.1680, while support rests at 1.1260, followed by 1.1200 and 1.1150.

Yen Slips Toward 144 on Stronger Dollar

The Japanese yen edged lower toward 144 per dollar on Tuesday, as the U.S. dollar strengthened amid optimism over potential U.S.-China trade talks and investor caution ahead of the Federal Reserve’s policy decision. President Trump suggested a possible reduction in tariffs on Chinese goods. Meanwhile, the Bank of Japan held rates steady but revised its growth and inflation outlook. Trading activity remained subdued due to a public holiday in Japan.

Resistance is located at 145.90, followed by 146.75 and 149.80. On the downside, support levels are at 139.70, then 137.00 and 135.00.

Gold Climbs on Safe-Haven Demand

Gold climbed to nearly $3,360 per ounce on Tuesday, marking its highest level in over a week, as renewed tariff threats from President Trump increased safe-haven demand. Trump announced a 100% tariff on foreign films and signaled upcoming measures targeting pharmaceuticals. Investors are now focused on the Federal Reserve’s policy decision, with rates expected to stay unchanged despite Trump’s push for cuts.

Resistance is expected at $3,385, then $3,450 and $3,500. Support stands at $3,300, followed by $3,265 and $3,200.

GBP Falls Ahead of Fed and BOE Meetings

Sterling fell 0.24% to $1.3265 on Tuesday as the U.S. dollar firmed ahead of the Federal Reserve’s policy decision, with rates expected to remain unchanged. While the dollar recovered slightly, doubts over its safe-haven appeal and Trump’s tariff stance persist. Markets also await the Bank of England’s meeting, where a 25 bps rate cut is expected. Dovish signals or dollar softness may support GBP/USD.

If GBP/USD breaks above 1.3430, the next resistance levels are 1.3500 and 1.3550. Support levels are at 1.3200, followed by 1.3050 and 1.2960.

XAG/USD Stable Ahead of Fed Decision

Silver (XAG/USD) held steady on Tuesday, underpinned by safe-haven demand as U.S. tariff tensions and global growth concerns persisted. Although the U.S. dollar saw a slight recovery, silver maintained its ground with markets focused on the upcoming Federal Reserve policy decision. Expectations for unchanged rates and possible future easing could continue to lend support to silver in the near term.

The first resistance is seen at $33.80, with higher levels at $34.20 and $34.85 if momentum builds. Support begins at $32.00, followed by $31.40 and $30.20.