Gold keeps eye on fresh all-time high, already above $3,120

LONDON (March 31) Gold price (XAU/USD) is residing near $3,120 at the time of writing on Monday and keeps an eye on its earlier fresh all-time high near $3,128. The move comes as with some last-minute flight to safety after the United States (US) President Donald Trump confirmed that Tuesday's reciprocal tariffs will apply to all countries. It seems that any hopes for some last-minute easing or paring back are off the table ahead of the deadline on Wednesday. 

Meanwhile, analysts from several major banks have raised their price targets for the precious metal, with Goldman Sachs Group Inc. ramping up its forecast to $3,300 by year-end. The lender cited higher-than-expected central bank demand and strong inflows into bullion-backed Exchange Traded Funds (ETFs). In the meantime, US yields gapped lower on Monday and are flirting with a break below the low of March at 4.172%.

Daily digest market movers: Option markets muted

• Option pricing in Gold is not becoming more expensive, and it is even becoming cheaper. This comes as markets see the Gold price higher for longer. This is not like Coffee futures earlier this year, where a supply shock sent Option prices spiralling higher. Seeing the drop in Option prices for Gold contracts could mean more upside is available with current levels becoming the new normal, Bloomberg reports. 
• The CME FedWatch tool sees a tilt in the chances of an interest rate cut by the Federal Reserve (Fed) as US yields are dropping lower this Monday. The tilt goes in favor of cutting rates, with chances for a rate cut in May increasing to 18.6% compared to near 11% one week ago. However, a rate cut in June looks almost inevitable, with only a 16.5% chance for rates to remain at current levels.
• This Monday, there is a very clear pattern ahead of reciprocal tariffs, with Gold rising, Bond prices shooting higher, and the US Dollar (USD) softening in this domino chain, while Equities sell off. 

FXStreet