Gold Continues to Consolidate
Gold ( XAU/USD ) has been fluctuating within a narrow range of $3,260–3,360 since the beginning of the week, due to a lack of new drivers and trade tariff news. On Monday, US Treasury Secretary Scott Bessent remarked that several key US trading partners have submitted ’very good’ proposals designed to forestall the imposition of US tariffs. He highlighted China’s recent exemption of some American goods from its counter-tariffs as a signal of Beijing’s intent to de-escalate trade tensions. Still, Bessent underscored that the US is actively engaged in negotiations and that the responsibility ultimately lies with China to implement substantive measures to reduce trade tensions.
"We’re starting to see the first signs of selling exhaustion", TD Securities commodity strategist Daniel Ghali said, adding that the risk of a downward correction in gold is extremely limited.
"Western investors, particularly discretionary traders or macro funds, have been completely under-positioned in this last leg of gold’s rally, and as a result of that, there’s a limited amount of selling activity, and gold prices are drifting higher to reflect that", Ghali added.
The bullish trend may continue, driven by increased demand for gold.
"Feedback from experts suggests that buyers are showing keen interest in various forms of gold, including higher karat gold jewellery, gold ETFs, digital gold, coins and bars, further strengthening its role in Indian households. Given the seasonal and wedding demand, strong gold buying is expected this festive season", Sachin Jain, regional executive director of World Gold Council India, wrote in a note.
XAU/USD fell during the Asian and early European trading sessions. Today, traders should continue monitoring developments around global trade tariffs. Also, US macroeconomic releases may trigger extra volatility. CB Consumer Confidence and JOLTS Job Openings reports are due at 2:00 p.m. UTC. Higher-than-expected figures may pause the rally in XAU/USD but are unlikely to break the bullish trend. Lower-than-expected results may push the pair above $3,350.
Euro Remains in Bearish Trend
The euro ( EUR/USD ) gained 0.43% against the US dollar (USD) on Monday. The US dollar weakened as investors underestimated the state of the US economy and began forecasting tariff cuts after recent comments from Treasury Secretary Scott Bessent.
"This is the calm before the storm. We’re consolidating, trading broadly sideways today, mostly within Friday’s ranges", said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
"The big stuff still lies ahead this week. We have largely seen soft survey data, but this week we will see evidence that weakness has crept into the real sector data such as Q1 GDP (gross domestic product), and that’s before the tariffs", Chandler added.
Meanwhile, eurozone economic statistics released this morning surprised the market. The German GfK Consumer Sentiment report was better than expected and showed that sentiment rose from −24.3 towards −20.6—the highest since November 2024. The economic outlook for the eurozone is still complicated by geopolitical uncertainties, such as ongoing global trade tensions and the effects of international conflicts, particularly in Ukraine. These factors push higher energy prices and make it difficult for the European Central Bank (ECB) to balance economic growth and low inflation.
EUR/USD fell during the Asian and early European trading sessions. Today, the market focuses on the US macroeconomic reports at 2:00 p.m. UTC: JOLTS Job Openings and CB Consumer Confidence. Stronger-than-expected figures could delay rate cuts by the Federal Reserve, bringing EUR/USD below 1.13000. Conversely, lower-than-expected results may weaken the greenback and push EUR/USD higher, above 1.14300.
British Pound Hits 3-year High
The British pound ( GBP/USD ) increased towards a three-year high of 1.34000 on Monday.
The EY Item Club has revised the U.K. economic outlook downward, citing the impact of US tariffs introduced by US President Donald Trump. The group now projects a gross domestic product growth rate of just 0.8% in 2025, down from its previous estimate of 1%. The firm also lowered its 2026 forecast towards 0.9%. The downgrade reflects expectations that the escalating global tariff war will dampen consumer spending and restrain business investment.
"Given the conflicting signals, I think a deal is very unlikely in the near-term, and China might be preparing for a protracted trade war", said Carol Kong, a currency strategist at Commonwealth Bank of Australia. "Overall, the US tariff policy is very chaotic, and markets definitely don’t like that, but there is indeed some growing optimism that the worst of the trade war is over".
GBP/USD fell slightly during Asian and early European trading sessions. Today, US JOLTS Job Openings data at 2:00 p.m. UTC may shift investors’ monetary policy expectations and trigger volatility in GBP/USD. Numbers exceeding the forecast may lower the probability of an interest rate cut by the Federal Reserve, pushing GBP/USD lower towards 1.33000. Lower-than-expected results will confirm that the US labour market is loosening, pushing GBP/USD above 1.34500.
