Trump Reignites Rate Cut Calls, Boosting Safe-Haven Demand for Gold

Market Overview

On Monday, investor confidence in U.S. assets took a hit after Donald Trump launched another verbal attack on Fed Chair Jerome Powell. The U.S. Dollar Index plummeted to its lowest level since March 2022, ultimately closing down 0.885% at 98.36. Riding on the back of a weaker dollar and increased safe-haven demand, spot gold surged more than $100 during the session, breaking above the $3,430/oz level and hitting fresh record highs. Gold ended the day up 2.91% at $3,424.37/oz. Spot silver touched the $33/oz mark before paring gains, closing 0.26% higher at $32.67/oz.

Hot Topics to Watch

● Trump Pushes for Rate Cuts Amid Inflation Claims

On Monday, Trump stated that with falling costs for energy and eggs, inflation is virtually nonexistent—but warned the economy could slow unless Powell acts now to cut interest rates. Markets interpret Trump's comments as an attempt to cushion the blow of renewed trade tensions. With broader tariffs than in his first term and a potentially more severe inflationary environment, the Fed may face an even tougher balancing act.

● No Breakthrough in U.S.-Mexico Tariff Talks

At the White House Easter event, Trump doubled down on his push for auto and steel tariffs, claiming progress in trade talks and promising major revenue gains for the U.S. Meanwhile, Mexican President Claudia Sheinbaum noted that in a recent phone call with Trump, both sides discussed tariffs on steel, aluminum, and cars and deemed the conversation productive. However, no agreement or tangible consensus was reached during the call.

Key Events to Watch (GMT+2)

• 20:55 — U.S. Redbook YoY Retail Sales (Week Ending April 19)

• 22:00 — Eurozone April Consumer Confidence (Preliminary)

• 22:00 — U.S. Richmond Fed Manufacturing Index (April)