Gold extends correction as trade war selloff intensify

LONDON (April 7) Gold price (XAU/USD) recovers and trades near $3,030 at the time of writing on Monday after falling 2% intraday in early trading as the trade war spirals out of control. Bullion could not withstand selling pressure with Stocks, the US Dollar (USD) and yields all dropping lower on Monday.  With China issuing its own retaliatory tariffs against the United States (US), markets are holding their breath for any further response from other countries. 

Meanwhile, investors will shift their focus to the US inflation data this week. Slowly but surely, the focus will now shift to the US economic data, which will bear its mark from the Donald Trump presidency. Markets will want to assess the impact of US President Donald Trump politics and how much it weighs on the US economic data. This Monday, traders are even pricing in five interest rate cuts from the Federal Reserve (Fed) this year. 

Daily digest market movers: Alerts flashing

• American billionaire hedge fund manager and chief executive officer of Pershing Square Capital Management William Albert Ackman asked President Trump on X to pause the current trade tariffs in order to first broker a trade deal. Ackman warns that Trump is losing business leaders' confidence, Reuters reports. 
• The CME FedWatch tool shows chances for an interest rate cut by the Fed in May standing at 49.3%, shooting up from 33.3% on Friday as rate cut bets grow. For June, a rates remaining steady scenario is out of the options. Only rate cuts are being pencilled in with a 53.5% chance of policy rate being cut to the 3.75%-4.00% range from the current 4.25%-4.50%.
• China’s central bank, the People’s Bank of China (PBOC), added Gold to its reserves for a fifth straight month in March, deepening its bet on the precious metal as a haven asset amid rising global trade and geopolitical turmoil. Gold held by the PBOC rose by 0.09 million troy ounces last month, according to data released on Monday. The central bank’s recent run of buying started in November, after a six-month hiatus that followed an 18-month buying spree, Bloomberg reports.

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