Market Digest

Global markets opened the week under heightened uncertainty after President Donald Trump’s latest tariff strategy triggered sharp cross-asset reactions. The plan, designed to pressure European countries into negotiations over Greenland’s control, revived trade-war anxiety and reignited risk aversion across global markets.

Gold dominated early trading, surging nearly $100 at the open and printing new all-time highs around $4,690/oz. The move reflected aggressive safe-haven positioning as investors priced in the possibility of a broader US–Europe trade confrontation, while geopolitical tensions remained elevated in the background.

In FX, the US dollar initially regained stability after Trump indicated he wanted Kevin Hassett to remain in his current role, reducing speculation that Hassett could become the next Federal Reserve Chair. Markets interpreted this as lowering the probability of a more dovish and politically exposed Fed leadership path, which helped the USD Index recover and close slightly higher.

Oil remained supported, with crude finishing modestly higher as traders reduced short exposure into the long weekend. While the probability of immediate US military action against Iran appeared to ease, the market continued to price a residual geopolitical premium given the strategic risk surrounding the Strait of Hormuz.

Key Macro Drivers

1) Trump Tariff Strategy and Trade Shock Transmission

Trump’s proposed tariff measures, framed as economic leverage tied to Greenland-related negotiations, created an immediate risk-off impulse. The market response was classic: gold spiked, the dollar saw mixed flows, and risk assets showed hesitation. The key issue for traders is that tariff escalation risk introduces uncertainty not only about trade volumes, but also about inflation dynamics and central bank reaction functions.

2) Fed Leadership Speculation and USD Stabilization

The USD strengthened late in the session after Trump’s comments reduced the market’s perceived likelihood of Hassett replacing Powell. Hassett had been viewed as one of the more dovish candidates and potentially less independent, which would have raised concerns about Fed credibility and policy consistency. With that scenario fading, the dollar found support, and rate-cut expectations were pushed further out, with markets leaning toward June for the first cut.

3) Geopolitics: Iran Risk Premium Still Present

Even as near-term escalation fears softened, geopolitical risk remained unresolved. Crude’s price action suggests the market is unwilling to fully remove the premium, especially with ongoing concerns about shipping routes and potential disruptions. That said, expectations of additional supply, including Venezuela-related flows, continue to cap upside momentum.

Cross-Market Performance Snapshot

US Dollar and Rates

The USD Index ended slightly higher around 99.38–99.41, recovering from earlier weakness. US Treasury yields stayed relatively firm, with the 10-year yield near 4.227% and the 2-year yield near 3.592%, reflecting a market still cautious about aggressive easing.

Equities

US equities closed marginally lower, showing a defensive tone rather than panic. The Dow slipped, while the S&P 500 and Nasdaq also edged down. European indices were mostly weaker as well, highlighting cautious positioning into uncertainty.

Commodities

Gold initially sold off on Friday due to profit-taking and easing geopolitical tensions, but Monday’s opening spike reversed the narrative sharply as tariff risks returned to the forefront. Silver and platinum saw heavier profit-taking pressure, suggesting the precious metals complex remains volatile and sensitive to positioning shifts.

Newsroom Highlights by Asset Class

Gold (XAU/USD): New All-Time Highs on Safe-Haven Shock

Gold’s explosive open toward $4,690 confirmed that risk hedging remains highly responsive to policy-driven uncertainty. Even though gold had pulled back previously on profit-taking, the renewed catalyst triggered aggressive demand. The market is now balancing strong bullish structure against the risk of short-term corrective moves after sharp vertical gains.

Oil (WTI & Brent): Supported but Range-Bound

WTI traded near $59.2–$59.4, while Brent held around $64.1–$64.2. The rally has slowed as the market weighs easing immediate Iran escalation fears against renewed trade-related demand risks and the possibility of a supply surplus. The result is stabilization rather than trend acceleration.

EUR/USD: Euro Softness vs USD Strength Dynamics

EUR/USD slipped near 1.1594 after the dollar strengthened. While the euro remains sensitive to US policy headlines, it also faces its own uncertainty tied to trade fallout and growth concerns. For now, price action suggests the pair is stuck in a short-term range, with markets waiting for the next macro catalyst.

USD/JPY: Yen Supported by Intervention Watch

JPY strengthened modestly, with USD/JPY near 158.16. Japan’s officials signaled concern over yen weakness, and markets remain alert to intervention risk, particularly if USD/JPY pushes toward the 160–162 zone. Expectations that the BoJ could tighten earlier to contain imported inflation also remain a key medium-term driver.

Technical Outlook (Key Levels)

USD Index (DXY)

The dollar index faced resistance below 99.50 and found support above 99.15. A rejection below 99.55 keeps the near-term bias tilted toward a move back into the 99.10–99.00 region. Resistance is located around 99.50–99.55, with higher resistance at 99.60–99.65. Support is at 99.10–99.15, followed by 99.00–99.05.

EUR/USD

EUR/USD held support above 1.1585 and faced resistance below 1.1630. If the pair stabilizes above 1.1570, the upside target shifts back toward 1.1630–1.1645. Resistance sits at 1.1625–1.1630, then 1.1640–1.1645. Support is at 1.1570–1.1575, then 1.1560–1.1565.

Gold (XAU/USD)

Gold found support above 4536 and faced resistance below 4621 in the prior session, but the Monday open pushed price action back toward record territory. If gold holds above 4640, the next upside targets sit at 4691–4717. Resistance is at 4690–4691, then 4716–4717. Support is at 4540–4541, then 4595–4596.

CWG Outlook and Trading Bias (Intraday Framework)

The short-term approach favors tactical execution with tight risk controls, as volatility remains sensitive to headlines. The bias for the USD remains sell-on-rallies within the stated range, while gold remains supported on dips as long as the broader safe-haven narrative stays active.

Gold remains structurally bullish, but the sharp spike increases the probability of intraday pullbacks before continuation. EUR/USD remains range-driven, and USD/JPY remains headline-sensitive due to Japan’s intervention risk.