Gold price sees US session push Bullion to $3,125

NEW YORK (April 10) Gold price (XAU/USD) is printing a stellar return on Thursday, moving around $3,120 at the time of writing. Since Tuesday morning, the precious metal has rallied nearly 5.00%. The main driver for the rally came from United States (US) President Donald Trump, who announced a 90-day pause to higher tariffs on 56 countries and the European Union, which will now be taxed at the 10% baseline rate. 

Trump also hiked levies on China to 125%, effective immediately, after the Asian country announced plans to retaliate with an 84% tariff on all US imports to take effect on Thursday. Those moves are exacerbating concerns that the world’s two biggest economies will keep the trade war escalating. The People’s Bank of China (PBOC), China’s central bank, weakened the Yuan (CNY) for the sixth straight session, despite US Treasury Secretary Scott Bessent’s warning the country not to do so on Tuesday. It looks like Beijing will use the country’s currency as a negotiation tool, as it did in the last trade war.

Daily digest market movers: Rate cut expectations shift

• The constant back-and-forth of the US administration’s tariff plan has shaken the entire world, as investors scramble to find direction and certainty. That’s generally been supportive for Gold, which is up 18% this year. The yellow metal has also been bolstered by hopes for more Federal Reserve monetary easing and central bank buying, Bloomberg reports. 
• The CME FedWatch tool shows that the chances of an interest rate cut by the Federal Reserve (Fed) in May have decreased to only 19,5% compared with 44.6% seen on Tuesday. For June, the chances of lower borrowing costs are 75.3%. 
• Gold is quickly getting back toward recent highs, with today’s boost coming along with a report that Chinese leaders are meeting to discuss stimulus measures. However, there is a bigger picture favoring Gold, which is that other financial assets are failing to retain their value as a safe haven. The precious metal dipped after the 2008 Global Financial Crisis (GFC) and then started a multi-year climb that is still going on. Long-term investors and even central banks are making Bullion a core holding through all market conditions, Reuters reports. 

FXStreet