On Friday, the United States will be releasing the PCE Price Index data. This announcement is particularly timely, as trade tensions begin to soar. As US President Donald Trump recently threatened, tariffs could climb even higher. This policy shift has weighed down on the US Dollar, which in turn has contributed to the bullish continuation of the XAU/USD pair. Still, technical readings are starting to show that the pair is set to continue its bullish run. On the American session, it blasted off to a new all-time high of $3,059.67.
Ahead of Friday’s data release, the XAU/USD pair has displayed strong recovery. ETH price is currently above the bullish 20 Simple Moving Average (SMA) for the 4-hour chart, albeit mildly bullish. It is just under $2968.40 at present. In addition, both the 100 and 200 SMAs are moving under the 50, reflecting continuing bullish sentiment. Further, technical indicators have once again restarted their upward progression in positive territory, an indication that a breakout to a new higher high is coming.
The general weakness of the US Dollar has been a key participant in driving the XAU/USD higher. Much of this depreciation is the result of President Trump’s trade war threats, especially as they’ve pertained to the automotive industry. Beginning on April 3, the U.S. will levy tariffs on cars. Expect tariffs on auto parts to be announced in May or later.
This has provoked the strong opposition of Canadian Prime Minister Mark Carney to the new tariffs. He calls them “a direct attack” on Canadian autoworkers.
“We will defend our workers, we will defend our companies, we will defend our country, and we will defend it together.” – Mark Carney, Canadian Prime Minister
With tariff escalation making trade barriers even more punitive, this is a time where the stakes are especially high. We are getting close to historical highs not seen since WWII. As experts have warned, in the long term, the re-routing of trade could reduce the sting of these tariffs.
We find ourselves today amidst a confluence of economic forces affecting our employees, their communities, and the financial markets in which we invest. Commercial property investors are anxiously anticipating the next PCE Price Index data release. They want to better understand what’s going on with inflation trends in general and how those trends should inform the course of monetary policy. At the same time, the US-China trade disputes still loom over FI’s prospect for currency stability and continue to threaten global economic growth.