Eurozone inflation usually has a decisive influence on the direction of European Central Bank (ECB) policy. With possible changes coming in April, the anxiety is swelling. Notably, U.S. President Donald Trump recently recalibrated a set of tariffs, thereby increasing the trade-weighted average tariff rate on all U.S. imports. This equals about 5.5 to 6.0 percentage points increase. Despite the differences in these tariffs, they are both likely to create additional confusion and turmoil in our already chaotic trade path.
The U.S. Dollar may be resuming its downtrend as stagflation concerns weigh on the greenback, adding fuel to the currency pair’s bearish fire. The long term view of the precious metal market is still bullish. With fears of a global trade war mounting, it’s getting close to an all-time high. President Trump’s recent tariff additions have only compounded these fears. Trade advocates are further alarmed by the prospect of retaliatory measures from other countries.
Mixed data from China’s National Bureau of Statistics (NBS) for March has bolstered the pair’s performance, alongside Australia’s strong private inflation figures and the broad weakness of the U.S. Dollar. These three factors together are propping up effective rents today, even with all the recent market volatility.
That trajectory for the precious metal seems limited, as it remains all too much at the mercy of the specter of harsher U.S. trade measures. Investors are still skittish—not least because fears of an escalation of tariffs by Trump administration would deepen that tension.