Gold prices slipped slightly on Friday after briefly hitting a new all-time high above $3,230 per ounce, yet remained firmly supported around $3,220. The yellow metal’s surge was fueled by growing safe-haven demand following China’s decision to raise tariffs on U.S. imports to 125% from 84%, escalating tensions in the ongoing trade war.
The U.S. Dollar (USD) faced intensified selling pressure amid mounting concerns over the country’s financial stability and economic outlook, further supporting gold’s bullish momentum. A notable development came on April 9, when U.S. Supreme Court Chief Justice John Roberts temporarily overturned a lower court decision, granting President Donald Trump the authority to dismiss members of independent agencies. The move raised alarms about the potential dismissal of Federal Reserve Chair Jerome Powell, sparking fears over the independence of the Federal Reserve and the broader economic consequences.
In response to Trump’s tariff hikes—confirmed by the White House at a staggering 145% on Chinese goods—Beijing retaliated with its own tariffs, strengthening its alliances with Europe and Asia to cushion the impact. This tit-for-tat has added further strain to the global economic outlook and raised the likelihood of a U.S. recession, prompting expectations of aggressive Fed rate cuts as early as May.
Economic Calendar on 10-11/04/2025
Further weighing on the greenback, U.S. Consumer Price Index (CPI) data for March came in softer than anticipated. Inflation rose by just 0.1% month-over-month, with the annual rate falling to 2.4% from 2.8% in February. Despite not fully reflecting the trade war’s effects, the report bolstered speculation that the Federal Reserve may implement as many as three to four rate cuts by year-end.
Looking ahead, market participants are eyeing the release of the U.S. Producer Price Index (PPI) and the preliminary University of Michigan (UoM) Inflation Expectations. However, analysts suggest these figures may take a back seat to the ongoing tariff negotiations. A profit-taking bounce in the U.S. Dollar is also possible, especially as traders reposition ahead of the weekend, potentially capping gold’s upside in the short term.
The global financial community now awaits China’s formal response to Trump’s steep tariff escalation, a key factor that could further influence both gold and currency markets in the coming days.