Gold prices surged to a record high last week as investors flocked to safe haven assets in anticipation of hotter inflation data than expected, as fears of a global trade war sparked by President Donald Trump's latest tariffs drove investors to safe haven assets. It is now up more than 17% this quarter, its best quarterly performance since 1986. The dollar weakened last week on concerns about economic growth, with falling stocks and lower Treasury yields benefiting the yen from safe-haven inflows before President Trump announced plans to impose reciprocal tariffs on Tuesday. Traders were optimistic that trade tariffs would not be as severe as feared, but they still worry that it would affect economic growth and reignite inflation. Investors are more cautious as it is unclear what tariffs will be imposed.

Market Performance Review Last Week:

Last week, from renewed tariff concerns to the continued persistence of inflation and sharp fluctuations in consumer sentiment and spending, these factors have led to a strong suppression of risk assets, and the three major US stock indexes collectively closed sharply lower. The S&P 500 is on track for its first quarterly decline in seven quarters, while the tech-centric Nasdaq is on track for its biggest quarterly drop since 2022. The Dow Jones Industrial Average closed down 715.80 points, or 1.69%, at 41,583.90; the S&P 500 closed down 112.37 points, or 1.97%, at 5,580.94; and the Nasdaq Composite closed down 481.04 points, or 2.70%, at 17,322.99.

Gold prices surged to a record high as investors flocked to safe-haven assets amid fears that President Trump's latest tariffs would spark a global trade war. Gold prices have remained sharply higher in a panic reaction to data that was more enthusiastic than expected. It is now up more than 17% this quarter, the best quarterly performance since 1986. Spot gold rose 0.92% to $3,085/ounce, and rose to $3,086.820 during the session to set a new record high, the 18th new high, and a cumulative increase of 2.07% this week.

Silver prices hit a high of $34.590 last week, the highest since October last year, and rose more than 3.30% for the week. Demand for the white metal has been strengthened as the new 25% tariff on cars entering the United States has raised concerns about global economic uncertainty. Traders are preparing for the weekend and focusing on the busy economic schedule in the United States.

The dollar weakened before the weekend due to concerns about economic growth before U.S. President Trump plans to announce reciprocal tariffs this week. The U.S. dollar index, which tracks the performance of the dollar against six major currencies, once fell to a pullback close of 103.90. Traders are not really focusing on the dollar, but withdrawing funds from the stock and cryptocurrency markets and flowing into the precious metals market. The date of the reciprocal tariff is approaching, scheduled for April 2, which has obviously caused tension among traders and market participants.

The euro rose 0.2% against the dollar to $1.0823 in late New York trading. The euro was supported by technical factors after approaching the 200-day moving average of $1.0726 and the key 38.2% Fibonacci retracement level of $1.0727 last Thursday. The dollar fell significantly against the yen after hitting a near four-week high, and the intraday decline widened, returning to below 150. Tokyo's inflation data exceeded expectations, triggering a surge in yen buying, while the dollar faces a test of inflation data, and the exchange rate is at a critical crossroads in the short term.

The pound remained firm, hovering around 1.2950, ​​as traders digested the latest US inflation report and the uncertainty of the trade war that may escalate after Trump's tariffs on cars. The pound outperformed other major currencies last week. Last week, the Australian dollar/dollar fluctuated in a narrow range of 70 pips, hovering within 30 pips above/below 0.6300. Despite tight demand for the dollar, the labor market struggled to gain ground, and nervousness about trade tensions and the Fed's uncertain policy outlook remained.

WTI crude oil prices fell on Friday on concerns that the US tariff war could trigger a global recession, but rose for the third consecutive week, closing at $68.85 a barrel after Washington increased pressure on OPEC members Venezuela and Iran. Brent crude fell 0.5% to $73.63 a barrel. US President Trump plans to announce reciprocal tariffs from April 2, which will cover a wide range of imported goods.

Bitcoin gave up gains and fell to around $85,000 before the weekend. US President Trump imposed a 25% tariff on all "non-US-made" imported cars, increasing the risk of a trade war and weighing on US stocks and Bitcoin bulls. Analysts said that at present, no price simplification has been achieved in terms of liquidity or the macro environment.

The final value of Michigan's 1-year inflation forecast for March was 5%. After the data was released, the 10-year U.S. Treasury bond fell by more than 7.3 basis points, refreshing the daily low of 4.29%; the two-year U.S. Treasury bond fell by more than 4.3 basis points, refreshing the daily low of 3.9427%.

Market Outlook for This Week:

For this week, there is a time point that is likely to be written into future economics textbooks-the "Trump Reciprocal Tariff" that is widely believed to be harmful to others and not beneficial to oneself will be released on April 2 local time, and the announcement time roughly corresponds to late Wednesday night to early Thursday morning Beijing time.

But the biggest problem at the moment is that the U.S. government has not yet figured out how to levy this tax. Although Trump's staff are working hard to form a plan, due to the U.S. president's erratic personality and constant contradictory demands, even Vice President Vance, White House Chief of Staff Susan Wiles and a number of cabinet officials have privately stated that they are not sure what Trump wants to do. What tariffs will he impose? On whom? What is the tax rate? These most basic questions have no answers yet.

The only thing that is certain now is that if Trump launches a broad-based tariff policy this week, he will face a collective counterattack from global trading partners. In the words of the European Union, a tough counterattack is the only way to get Trump to sit down for negotiations.

In addition to the tariff issue, there are also many economic data and events next week. First of all, the US JOLTs job vacancies data, ADP employment report and non-farm data will be released this week. As the second full month since Trump took office, the market is also waiting to see how much impact his reckless policies will have on the US job market. After the release of non-farm data on Friday, Federal Reserve Chairman Powell will give a speech.

At the same time, there are PMI reports from all over the world this week, showing the trend of economic activity in various regions.

The market ushered in Trump's tariff week; the US dollar may fall for the quarter this week

The US dollar failed to maintain the gains at the beginning of last week and finally reversed direction. Against the backdrop of continued concerns about the US economy, the last week ended with a correction, and the tariff narrative remained vague. After the previous rise, the US dollar index ended the week with little change against the backdrop of unstable US performance, continued tariff concerns and fears that the US economy may be frightening.

The dollar is on track for a quarterly decline this week as concerns about tariffs slowing U.S. economic growth have pushed down U.S. bond yields, stocks and the dollar exchange rate. This week, the fever around U.S. tariffs was revived on Wednesday with the introduction of new tariffs of 2.5% on U.S. auto and auto parts imports. In fact, the government plans to introduce so-called reciprocal tariffs - tariffs on imported goods that match the tariffs imposed by other countries on U.S. goods. The goal is to correct trade imbalances with countries that export more to the U.S. than they import.

In addition to the tariff narrative, the recent price action of the dollar has been driven by eager speculation about a potential economic panic, which has been reinforced by weak data and interruptions in market confidence. Although inflation remains above the Fed's 2% target, as reflected in the CPI and PCE indicators, a strong labor market adds another layer of complexity to this narrative.

The expected optimism in the dollar was a reaction to the threat of further tariffs from the customs, however, concerns about how the U.S. economy would fare in this new context of trade tensions ultimately hurt market sentiment, leading to a fall in the index. This shift in the dollar was accompanied by a generally mixed performance in the U.S. Although it has fallen back to a multi-day low in the short term, the medium and long term cut some of the intra-week recovery on Friday, and the cognitive increase was maintained during the week.

Gold prices may fluctuate more this week, and are expected to refresh the historical high to around 3150 again

This week is Trump's tariff week, and countries are relatively tough at present. Mexican President Sheinbaum said on March 28 local time that he opposed the unilateral imposition of a 25% automobile tariff by the United States. Mexico will wait for Trump to announce new tariff measures on April 2 to make a "comprehensive response." Mexico is formulating comprehensive response measures to strengthen the national economy and respond to unilateral behavior. At the same time, the negotiation process with the United States is still continuing, striving to ensure stable employment, maintain investment, and avoid damaging the interests of the United States and Canada.

Gold prices are currently bullish. Although some traders have taken profits, gold prices may fluctuate more this week under the intensification of tariffs and geopolitical tensions.

Future trend outlook. Based on the fundamental and technical signals, spot gold is still in a bullish upward cycle in the short term, but we need to be vigilant about marginal changes in market sentiment, but it is expected to refresh the historical high to around 3150 again.

The storm of sanctions pushes up oil prices; demand clouds over the rise

The US trade policy of imposing tariffs on many countries has exacerbated market concerns about a "hard landing" of the global economy. Most institutions believe that if trade frictions escalate, crude oil demand may suffer a cliff-like decline. The current rise in oil prices is more like a "passive bull market" driven by the supply side, lacking sustainable support for demand growth. In summary, the geopolitical dividend and the risk of demand recession have formed a tug-of-war, causing oil prices to fall into high-level fluctuations in the short term. The market generally believes that before the haze of the trade war is dissipated, oil prices are unlikely to see a unilateral surge. The future trend needs to pay attention to further changes in the international trade situation and further changes in the supply and demand side of the crude oil market.

Conclusion:

The Trump administration's 25% auto tariff is like a boulder thrown into the global economic lake, stirring up layers of ripples. As the smoke of the trade war fills the air, the Federal Reserve is facing an unprecedented policy dilemma: on one hand, there is inflationary pressure that may be pushed up by tariffs, and on the other hand, there is the economic growth momentum that may be damaged. In this dangerous balancing game, the Federal Reserve chose to "use stillness to control braking", but the market knows that this silence is just the calm before the storm. In this economic change caused by tariffs, the Federal Reserve's wait-and-see strategy is both a helpless move and a wise choice. But everyone knows that when the data fog dissipates, it is the day when monetary policy will be revealed. Under the shadow of the global trade war, the big ship of the US economy is heading for unknown waters, and every policy adjustment of the Federal Reserve may trigger a new market tsunami.

Overview of important overseas economic events and matters this week:

Monday (March 31): State Council Information Office held a press conference on the 8th Digital China Summit, China's official manufacturing PMI in March, the US Chicago PMI in March, and Germany's CPI in March

Tuesday (April 1): China's Caixin Manufacturing PMI in March, the Reserve Bank of Australia announced its interest rate decision, Japan's February unemployment rate, the eurozone's March CPI, the US ISM Manufacturing PMI in March, the US JOLTs job vacancies in February, and the European Central Bank President Lagarde delivered a speech at the AI ​​Conference

Wednesday (April 2): ​​US ADP employment in March: US President Trump plans to announce "reciprocal tariffs" on April 2, local time in the United States

Thursday (April 3): China's Caixin Services PMI in March, the US trade account in February, and the European Central Bank announced the minutes of the March monetary policy meeting

Friday (April 4): China (including Hong Kong and Taiwan) exchanges are closed due to the Qingming Festival, the US March non-farm payrolls report, and the Federal Reserve Chairman Powell delivered a speech

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