Gold Retreats From Its High
The gold () price failed to hold above the important $3,336 level yesterday. Some investors opted to secure profits and exit long positions before the extended weekend.
Although a rally in XAU/USD seems to have paused, the pair remains in a very strong uptrend. The weak US dollar (USD), escalating trade tensions between the US and China, and structural demand of global central banks continue to support the bullion.
“I think (gold) is quite overbought, and there’s some profit taking at work. However, big dips in gold will be bought into because the landscape going into 2025 is still very uncertain”, said Marex analyst Edward Meir.
The tariff drama is still unfolding. Recently, US President Donald Trump ordered a probe into potential tariffs on all critical mineral imports, in addition to reviews of pharmaceutical and chip imports.
At the same time, the US is currently negotiating trade tariffs with several countries, and there is a possibility that a trade deal with Japan could be announced over the weekend. This may provoke a downward correction in gold.
“We remain bullish towards gold. That said, near-term corrections are likely to occur as tactical players take profits or perhaps experience margin calls triggered by another round of equity liquidations”, said analysts at consultancy Metals Focus.
Today, the US market is closed due to the Good Friday holiday. Volatility will also be low on Monday due to the Easter Monday holiday. Traders should keep an eye on any tariff-related news and developments around trade talks, specifically with Japan. Key levels to watch are resistance at $3,360 and support at $3,283.
Euro Declines After ECB Rate Cut
The euro () lost 0.31% against the (USD) after the European Central Bank (ECB) cut its base rate, as expected.
On Thursday, the European Central Bank cut its for the seventh time in a year. The regulator also cautioned that US tariffs would significantly impede economic growth, increasing expectations for further monetary easing in the coming months.
“It has a dovish tone. Focus has shifted to looking at the downside risk to the growth outlook, rather than upside risk to inflation”, said Kirstine Kundby-Nielsen, FX analyst at Danske Bank.
Indeed, interest rate swaps market data currently implies a 20% chance that the ECB will reduce its base rate towards just 1.25% by mid-2026, putting it substantially below the (Fed) expected base rate. The divergence in monetary policy expectations may be shifting in the US dollar’s favour.
Jerome Powell, the Fed Chair, said that the US central bank would wait for more economic data before changing interest rates. Still, he cautioned that Trump’s tariff policies may push and employment indicators further from the central bank’s goal. At the same time, Thursday’s data showed that the number of Americans filing applications for benefits fell last week, suggesting that labour market conditions remained stable in April. Overall, the risk of a strong downward correction in EUR/USD has increased. If the US strikes a trade deal with Japan over the weekend, (DXY) may jump sharply, pushing other currencies lower.
EUR/USD remained relatively unchanged during the Asian and early European trading sessions. Today, the US market is closed due to the Good Friday holiday, and volatility will likely be low. Also, the liquidity will likely remain thin until Tuesday as the US and other countries celebrate Easter on Monday. Traders should monitor any tariff-related news and negotiations, specifically with Japan. Key levels to watch are resistance at 1.14250 and support at 1.12780.
ETF Investors Believe in Bitcoin
On Thursday, (BTC/USD) gained 1.11% against the US dollar (USD) and was moving near $85,000 due to continued inflows into exchange-traded funds (ETFs).
“The ETFs and Saylor have been buying up all the “dumps” from the tourists, FTX refugees, GBTC discounters, legal unlocks, govt confiscations, and Lord knows who else”, said Bloomberg ETF analyst Eric Balchunas.
Michael Saylor’s firm, Strategy, purchased 3,459 BTC for $285.5 million on 14 April at an average price of $82,618. Over the past 30 days, BTC/USD ETFs have attracted $131.04 million and are up $2.4 billion since 1 January. Balchunas called these inflows ’impressive’, noting they help explain why Bitcoin has been relatively stable.
The expected rate cuts by the Federal Reserve (Fed) are the second major factor that could support crypto investors. Jerome Powell, US Fed Chair, stated there were concerns about Trump’s tariffs policy, which will negatively impact inflation and unemployment rates. Thus, the Fed may have to reduce the base rate more aggressively than the regulator planned to.
BTC/USD declined slightly during the Asian and early European trading sessions. The price is moving above $84,500, and the 100-hour simple moving average zone—a strong support level—is being tested. BTC must break above the $85,200 resistance to continue rising in the near term. Low volatility is expected due to the Easter holidays between 17 and 22 April, which may limit BTC/USD moves.
