Gold prices drop due to strong US dollar and recession fears, long-term bullish trend remains

From Investing.com: 2025-04-08 03:12:00

Gold prices dropped by 1.8% as US Treasury yields rose and the US dollar strengthened on fears of a global recession. Despite the decrease, the long-term bullish trend for gold remains intact due to ongoing trade tensions and geopolitical uncertainty. Traders are turning to safe havens like the Swiss franc and Japanese yen amidst market turmoil. Money markets anticipate significant interest rate cuts by the Fed, which could benefit non-yielding assets like gold in a low-interest environment. XAU/USD may bounce to $3,049 per ounce, according to Reuters analyst Wang Tao.

The euro fell by 0.47% against the US dollar following reports of potential additional tariffs by US President Trump. The volatile trading session saw EUR/USD fluctuating between 1.08780–1.10500 after initial optimism about tariff delays turned bearish. Traders are favoring safe-haven currencies like the US dollar, Swiss franc, and Japanese yen amid trade uncertainty. The European Commission proposed counter-tariffs on US goods while leaving room for negotiations with the US. Any progress in talks could lift EUR/USD, while failure could lead to a sharp decline. Key levels to watch are at 1.10500 and 1.08780.

The British pound dropped by 1.33% against the US dollar as investors sought safety amidst a general risk-off sentiment. Concerns about the impact of trade tariffs on the US economy could weaken the US dollar’s safe-haven appeal. President Trump’s tariff announcements triggered a market sell-off, prompting expectations for Fed rate cuts. Although the BoE is expected to cut rates, the fundamental pressure on GBP/USD may turn bullish in the near future. Key levels to watch are at 1.28000 and 1.27000.



Read more at Investing.com: Gold Falls as US Dollar Strengthens on Tariff Fears and Recession Risks