Safe-Haven Demand Lifts Gold, Yen, and Pound (04.16.2025)

The U.S. dollar index dropped below 100 on Wednesday, nearing a three-year low, as investors awaited remarks from Fed Chair Jerome Powell. 

The EUR/USD held near 1.1323 despite mixed Eurozone data. The Japanese yen rose past 143 on safe-haven flows and fresh trade tensions. Gold surged to a new all-time high above $3,260, while silver remained firm around $32.30. The British pound climbed to $1.32 on optimism over delayed U.S. auto tariffs and rising BoE rate cut expectations.

EUR/USD Stable as Dollar Slides

The EUR/USD pair hovered near 1.1323 early Wednesday, while the U.S. Dollar Index fell below the 100 mark, approaching its lowest level in nearly three years. Investors remain focused on an upcoming speech by Federal Reserve Chair Jerome Powell, as the central bank seeks to support economic growth while managing inflation risks heightened by recent tariff developments. In the Eurozone, industrial production data exceeded expectations, though the ZEW economic sentiment index fell short of forecasts in Tuesday’s releases.

Key resistance is at 1.1400, followed by 1.1475 and 1.1500. Support lies at 1.1260, then 1.1180 and 1.1100.

Yen Rises Past 143 on Trade Jitters and Weaker Dollar

The Japanese yen strengthened past 143 per dollar on Wednesday, supported by a weaker U.S. dollar amid renewed trade worries. The greenback fell after President Trump ordered a probe into tariffs on critical mineral imports, many from China. Attention now turns to upcoming U.S.-Japan trade talks, where Tokyo will push to remove existing tariffs. Meanwhile, Japanese manufacturing confidence rose to an eight-month high in April, though broader caution persists due to trade uncertainty.

Key resistance is at 144.20, with further levels at 148.30 and 152.50. Support stands at 141.80, followed by 141.00 and 139.70.

Gold Climbs as Investors Await Powell

Gold climbed toward $3,260 per ounce on Wednesday, setting a fresh record high as ongoing uncertainty over U.S. trade policy drove demand for safe-haven assets. The upward move was also supported by a softer U.S. dollar and continued positive sentiment from major financial institutions, citing strong inflows into gold-backed ETFs and steady central bank buying. Market participants are now awaiting key U.S. retail sales data and a speech from Federal Reserve Chair Jerome Powell later today, looking for further guidance on the economic outlook and potential shifts in monetary policy.

Key resistance is at $3,290, followed by $3,330 and $3,380. Support stands at $3245, then $3190 and $3135.

Pound Gains on Easing Trade Risks

The British pound climbed above $1.32 on Wednesday, a six-month high, supported by easing trade tensions and shifting BoE expectations. Hopes that Trump may delay auto tariffs boosted UK exporters, especially auto parts firms.

Markets are nearly fully pricing in a BoE rate cut in May, as companies begin job cuts ahead of tax hikes and rising wage costs. Private wage growth stayed high at 5.9%, but March saw a sharp drop in employment.

While a stronger pound may ease inflation near term, upcoming energy and regulated price hikes could complicate BoE policy. Rate cut expectations are rising.

If GBP/USD breaks above 1.3270, resistance levels are at 1.3430 and 1.3500. Support is at 1.3015, followed by 1.2900 and 1.2700.

Silver Holds Ground Amid Policy Confusion

Silver hovered around $32.30 on Wednesday as markets weighed mixed signals from U.S. trade policy. While Trump exempted some tech products and may delay auto tariffs, uncertainty persisted after the Commerce Department launched national security probes into semiconductor and pharmaceutical imports. President Xi warned that "no one wins in a trade war."

Fed Governor Waller said tariff-driven inflation would likely be temporary and reiterated the Fed’s readiness to cut rates to support growth.

Silver faces resistance at $32.50, with further upside levels at $33.00 and $33.80 if broken. On the downside, support is seen at $31.40, followed by $30.20 and $29.20.