Gold price briefly becomes falling knife with selling pressure picking up

LONDON (April 3) Gold price (XAU/USD) sees selling pressure pick up towards the United States (US) trading session on Thursday, selling off over 1.25% towards $3,095 at the time of writing. Traders are taking profit, pushing the Bullion price below important pivotal levels. Markets see all asset classes absorbing the overnight shocking statement from United States (US) President Donald Trump, who unleashed his reciprocal tariff plan onto the world. 

Traders are still mulling over the meaning of the announcement where a global base tariff of 10% is the minimum to apply to any country in the world importing into the US. From there, all other earlier levies remain in place, which means, for example, a total of 54% tariff on China applicable as of this Thursday. Markets are seeing safe haven flow with Equities dropping multiple percentages globally, bond yields falling as Bonds are bid and the US Dollar (USD) devaluing against all major currencies. 

Daily digest market movers: Small window of opportunity

• Asian Gold producers rise after the precious metal hit a record high as US President Donald Trump’s “reciprocal” tariffs stoke fears of a global economic slowdown and raise demand for haven assets, Bloomberg reports. The move goes against the overall global selloff seen in Equities. 
• The CME FedWatch tool sees chances for an interest rate cut in May standing at 21.5%. A  cut in June is still the most plausible outcome, with only a 27.5% chance for rates to remain at current levels. In the overall yield curve a shift is noticed that a longer pause from the Fed might play out here. 
• Going back to the White House fact sheet in detail, Steel, Aluminum, Gold and Copper imports won’t be subject to reciprocal tariffs, providing at least some relief to domestic buyers who are already bearing the cost of 25% tariffs under Section 232 of the Trade Act of 1962 on all imports of some key metals, Reuters reports. 
• Treasury Secretary Scott Bessent issued comment after the announcement of reciprocal tariffs by United States (US) President Donald Trump, that tariffs could quickly be lifted or removed if countries bring back their production to the US.

FXStreet