Gold's price remained stable on Monday after experiencing an initial surge during the Asian trading session. This comes as a series of dynamic market events unfolded, with significant movements in the cryptocurrency and foreign exchange markets. The announcement by former US President Donald Trump of a US 'Crypto Strategic Reserve' on his Truth Social platform notably influenced the cryptocurrency market, propelling Cardano's price by more than 70% on Sunday. However, by Monday, Cardano's price had retraced, trading down by 11.5% at approximately $1.
The anticipation of upcoming US tariffs on Mexico and Canada, set to take effect on Tuesday, along with additional tariffs on China, is not spurring a flight into Gold as might have been expected. Instead, the market appears to be reacting with caution. Meanwhile, the EUR/USD extended its daily recovery toward 1.0450 during the European session on Monday. This recovery is being tempered by concerns over impending US tariffs and ongoing geopolitical developments.
In the Forex market, GBP/USD demonstrated resilience, clinging to mild gains above 1.2600 in the European session on Monday. The retreat of the US Dollar amid increased risk appetite and the potential for a truce in the Ukraine conflict provided support for GBP/USD. In addition, recent data from the Euro area revealed a rise in core Harmonized Index of Consumer Prices (HICP) inflation by 0.6% month-on-month in February, following a decline of 0.9% in January. This data lent support to the Euro amidst the complex market dynamics.
Gold's steadiness amid these developments suggests that investors are carefully weighing their options in light of economic uncertainties. While the initial surge in Gold's price during the Asian session hinted at a potential flight to safety, the lack of follow-through suggests that other factors are influencing investor sentiment.
The cryptocurrency market displayed significant volatility over the weekend, primarily driven by Trump's announcement regarding the US 'Crypto Strategic Reserve.' The sharp rally in Cardano's price was followed by a notable pullback on Monday as market participants reassessed their positions. Despite the initial enthusiasm, the market's reaction underscores the uncertainty surrounding policy announcements and their long-term implications.