25 Mar 2025

Gold prices have risen slightly, breaking a three-day decline, although this increase lacks momentum. The US Dollar has maintained its recent recovery, reaching a three-week high, which limits the potential for the XAU/USD pair. Expectations of a Federal Reserve rate cut continue to support the precious metal as market participants await US economic data.

During the first half of the European session on Tuesday, gold (XAU/USD) has struggled to capitalize on modest intraday gains but has managed to stay above the significant $3,000 level. Global risk sentiment remains bolstered by expectations of less disruptive US trade tariffs, optimism regarding a peace agreement between Russia and Ukraine, and stimulus measures from China. Meanwhile, the US Dollar has retained its recent gains, which poses a challenge for gold prices.

Nevertheless, the increasing belief that the Federal Reserve will soon initiate a rate-cutting cycle is preventing USD bulls from making aggressive moves, thereby providing some support for non-yielding gold. Additionally, the absence of significant selling pressure below the $3,000 mark suggests caution is warranted before concluding that the XAU/USD has reached a peak in the short term, especially as traders prepare for potential further declines from the all-time high. Market participants are now looking ahead to upcoming US economic reports for short-term trading opportunities.

Daily market movers summary: China imposes challenges for US agriculture  
Gold is experiencing a significant increase in trading volumes within bullion-backed Exchange Traded Funds (ETFs), marking one of the more noteworthy trends in the commodities sector as the first quarter of 2025 draws to a close. If this trend continues, it bodes well for price increases in the upcoming second quarter, according to Bloomberg.  
In the ongoing acquisition discussions between Australia’s Gold Road Resources and South Africa’s Gold Fields, Gold Road Resources CEO Duncan Gibbs has stated that the $3.3 billion takeover offer from Gold Fields is insufficient, characterizing the proposal from the Johannesburg-based company as excessively aggressive and hostile, as reported by Reuters.  
A proposal from the Trump administration to impose tariffs on Chinese-manufactured ships entering US ports is causing alarm within the US agriculture sector, with farmers expressing concerns that the additional costs could disrupt exports of wheat, corn, and soybeans, according to the Financial Times.  
On Monday, Trump introduced a new strategy in economic diplomacy by threatening to implement "secondary tariffs" on nations purchasing oil from Venezuela, aiming to restrict its oil trade with other countries. This has raised further tariff concerns in the markets, as it is perceived as a method to impose substantial tariffs without requiring reciprocity, as reported by Bloomberg.