Gold Surges to New High Amid Heightened Uncertainty

• Wall Street witnessed a technical rebound in the last session but remains weighted on Trump's aggressive trade policies.

• Gold surged to above the $3,000 mark as the market observed overwhelming uncertainties.

• Eyes are on this week's central banks' decision, including the Fed, BoJ, and BoE.

Market Summary

Wall Street staged a technical rebound last Friday, but investor sentiment remains fragile amid uncertainty surrounding Trump‘s aggressive trade policies. Market participants are now turning their attention to Wednesday’s FOMC interest rate decision, seeking guidance from Fed Chair Jerome Powell on the central banks policy outlook and its potential impact on the U.S. dollar and equity markets.

Despite the brief relief rally, Wall Street futures slipped during the Asian session, reflecting lingering skepticism over the economic outlook. Meanwhile, Chinese markets have outperformed, with the Hang Seng Index and China A50 index climbing higher, as traders diversify away from U.S. equities due to concerns over Trumps policy stance.

The heightened uncertainty in global markets has propelled gold to an all-time high, breaching the $3,000 mark for the first time in history, reinforcing strong demand for safe-haven assets. In the energy sector, oil prices extended gains after reports that the Trump administration launched its largest military operation to counter Houthi attacks on shipping routes, raising geopolitical risks and fueling supply concerns.

Beyond the FOMC, investors are also closely watching the Bank of Japan‘s (BoJ) interest rate decision on Wednesday and the Bank of England’s (BoE) decision on Thursday, both of which could add further volatility to global markets.

Current rate hike bets on 19th March Fed interest rate decision:

Source: CME Fedwatch Tool

0 bps (95%) VS -25 bps (5%)

Market Movements

DOLLAR_INDX, H4

The Dollar Index remains under pressure, consolidating in a bearish zone as soft US economic data weighs on sentiment. Weak CPI and PPI reports signal a slowing economy, reinforcing expectations of dovish Fed stance. Prolonged trade tensions and economic uncertainty may keep the dollar on the defensive.

The Dollar Index is trading lower while currently testing the support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 30, suggesting the index might enter oversold territory.

Resistance level: 105.65, 107.60

Support level: 103.65, 101.70

XAU/USD, H4

Gold surged to a record high, briefly testing the $3,005 psychological level, as safe-haven demand increased due to trade war risks and US economic weakness. However, a Russia-Ukraine ceasefire deal and Chinas new stimulus plan could limit further upside, as improved global sentiment may reduce demand for gold. Still, ongoing trade fears and a weaker dollar could provide continued support.

Gold prices are trading flat while consolidating in a zone between resistance and support level. MACD has illustrated diminishing bullish momentum, while RSI is at 70, suggesting the commodity might enter overbought territory.

Resistance level: 3005.00, 3055.00

Support level: 2970.00, 2940.00

EUR/JPY, H4

The EUR/JPY pair has been trading in a higher-low price pattern, rebounding from its monthly low near the 155.00 mark, suggesting potential bullish momentum. The Japanese yen has weakened as market expectations for Bank of Japans monetary policy have shifted toward a more dovish stance. Amid heightened global uncertainties, the BoJ is widely expected to keep interest rates unchanged during its upcoming policy meeting on Wednesday. The EUR/JPY may seize the chance of a weakening Japanese Yen to break its next resistance level at 162.15 mark.

The pair has been trading in a lower-low price pattern and is poised to break above its next resistance level at 162.15. The RSI has been flowing above the 50 level while the MACD is sliding toward the zero line from above, suggesting that the bullish momentum is easing.

Resistance level: 162.15, 164.80

Support level: 159.70, 157.90