In an unexpected twist resembling a reality show, the White House became the stage for a tense encounter involving Ukraine's President Volodymyr Zelenskyy. The event unfolded during Donald Trump's presidency, marked by his distinct approach to international relations and economic policies. While Trump's dressing down of Zelenskyy captured headlines, the broader market dynamics required attention as well. The US Dollar faced challenges, influenced by soft US data and tariffs imposed on Mexico, Canada, and China starting March 4. This monetary backdrop has seen Gold and AUD/USD react favorably, while USD/JPY remains steady.
The White House incident highlighted President Trump's penchant for assertive diplomatic exchanges, a hallmark of his tenure. Meanwhile, markets had to juggle not only the geopolitical dramas but also Trump's key actions, such as tariffs affecting several major trade partners. The US Dollar, subsequently, found itself on the backfoot against most G7 currencies as the fallout from these policies unfolded.
Gold emerged as a beneficiary in this scenario, climbing above $2,880 on Monday afternoon. The precious metal distanced itself from recent lows, supported by uncertainties surrounding the Trump administration's trade policies and retreating US yields following lackluster PMI data. Gold's resilience underscores its role as a safe-haven asset amid global economic uncertainties.
On the currency front, AUD/USD managed to regain ground on Monday after six consecutive days of losses. The pair's recovery to the 0.6250 zone was bolstered by both the sharp pullback in the US Dollar and the release of the Reserve Bank of Australia's minutes. This combination offered a brief respite for the Australian Dollar amid broader market volatility.
Conversely, USD/JPY commenced Tuesday's Asian session unchanged after registering a 0.74% loss on Monday. The pair's decline reflected broader market reactions to shifting US economic indicators and trade policy uncertainties. These factors collectively support XAU/USD as investors navigate an unpredictable global financial landscape.