Gold Prices Started New Rally
The gold price ( XAU/USD ) surged 2.81% on Monday climbing above $3,370 per ounce to reach their highest level in over three weeks, as investors pivoted toward safe-haven assets amid escalating geopolitical and economic tensions.
The surge was supported by a 0.7% drop in the US dollar , which enhanced the metal’s appeal for international buyers and added momentum to the upward move. With markets already on edge, gold’s traditional role as a hedge against volatility and currency weakness came sharply back into focus.
Investor anxiety intensified following former President Donald Trump’s announcement of a planned tariff hike on steel and aluminum imports, doubling existing rates to 50% effective June 4. The move reignited fears of a broader trade war, particularly as Trump accused China of breaching a recently negotiated tariff truce—claims swiftly rebutted by Beijing. The renewed friction between the world’s two largest economies deepened uncertainty around global trade policy, prompting a flight to safety that lifted demand for gold as a strategic store of value.
XAU/USD fall during the Asian and early European trading sessions. Today, the main focus is on the U.S. JOLTS Job Openings report at 2:00 p.m. UTC. The data may affect investors’ interest rate expectations and trigger some volatility in XAU/USD. Higher-than-expected figures may lower the probability of an interest rate cut by the Federal Reserve (Fed), potentially pushing XAU/USD below $3,340. Lower-than-expected numbers will confirm that the U.S. labour market is loosening, increasing the chances of an additional rate cut by the Fed later this year. In this case, XAU/USD may rise above $3,400.
Euro Rally Continues Driven by Deeper-than-expected Federal Reserve Rate Cuts and Stumble in U.S. Economy Growth
The euro ( EUR/USD ) gained 0.84% against the US dollar (USD) on Monday.
“The DXY fell faster than we had anticipated in our year-ahead outlook, reaching our year-end target of 101 last month. We think that this weakening trend continues, and we now forecast the DXY to fall an additional 9% over the next 12 months to 91, with USD weakness most pronounced against its safe-haven peers – EUR, JPY, and CHF,” Morgan Stanley strategists said in their mid-year outlook.
China’s Commerce Ministry dismissed the recent U.S. trade accusations as "groundless" on Monday, vowing to implement strong, though unspecified, countermeasures to protect national interests—signaling a firm stance amid escalating tensions. Meanwhile, U.S. Treasury Secretary Scott Bessent sought to calm market nerves, stating on Sunday that a call between former President Donald Trump and Chinese President Xi Jinping is likely imminent and expressing confidence that the dispute “will be ironed out,” offering a potential diplomatic path to de-escalation.
EUR/USD fell during the Asian and early European trading sessions. Today, the market focuses on the U.S. JOLTS Job Openings report at 2:00 p.m. UTC. Stronger-than-expected figures could delay rate cuts by the Federal Reserve, bringing EUR/USD below 1.13500. Conversely, lower-than-expected results may weaken the greenback and push EUR/USD higher, above 1.14500.
Sterling Rises as Tariff Worries Resurface
The British pound ( GBP/USD ) won 0.66% against the US dollar (USD) on Monday as the U.S.–China trade tensions and the announcement of new U.S. metals tariffs
President Trump revealed plans to double tariffs on steel and aluminum imports, prompting swift backlash from Beijing, which accused Washington of violating a recent trade agreement and pledged to retaliate. These developments heightened investor concerns over global trade disruption, supporting safe-haven flows and exerting pressure on risk assets across sectors exposed to global manufacturing and commodities.
Meanwhile, the British pound found support from growing optimism around the UK economy. The International Monetary Fund revised its 2025 GDP growth forecast upward to 1.2% from 1.1%, citing resilience in consumer demand and investment. However, the IMF also urged Chancellor Rachel Reeves to uphold fiscal discipline ahead of the June 11 Spending Review. Inflationary pressures remain persistent, with grocery prices climbing 4.1% year-on-year in May-the highest since early 2024-driving consumers toward lower-cost alternatives. In response, markets have tempered expectations for monetary easing, now pricing in only around 40 basis points of rate cuts from the Bank of England by year-end.
GBP/USD rose during the Asian session but fell during the early European trading sessions. U.S. JOLTS Job Openings data, due at 2:00 p.m. UTC today, may shift investors’ monetary policy expectations and trigger volatility in GBP/USD. Numbers exceeding the forecast may lower the probability of an interest rate cut by the Federal Reserve (Fed), pushing GBP/USD towards 1.34500. Lower-than-expected results will confirm that the U.S. labour market is loosening, pushing GBP/USD above 1.35600.