Monday Market Recap
Global markets saw major volatility on Monday, with gold experiencing an intraday swing of nearly $100. During the Asian session, it briefly surged past $3,050, but quickly reversed course, breaking below the $3,000 threshold and ending the day down for the third consecutive session. Spot gold closed at $2,982.55/oz.
Meanwhile, oil prices plunged to a three-year low, as investor concerns grew over US President Donald Trump’s latest tariffs potentially pushing the global economy into recession and curbing energy demand.
Gold Outlook
Gold saw intense fluctuations on Monday, with a nearly $100 swing. It briefly topped $3,050 in Asian trading before falling back and closing below the key $3,000 mark for the third day in a row. Spot gold dropped 1.85%, closing at $2,982.55/oz.
Tradu’s senior market analyst Nikos Tzabouras commented:
“In times of market turmoil, investors are shifting toward other safe-haven currencies like the dollar, Swiss franc, and yen. This has added pressure on gold and increased the risk of a deeper correction.”
The US dollar rose 0.53% against a basket of other currencies, marking its second straight day of gains and moving further from last week’s six-month low. A stronger dollar makes gold more expensive for holders of other currencies.
Trump’s new tariff policy has sparked renewed fears of a global economic slowdown. According to China’s Ministry of Commerce, the US has threatened to raise tariffs on Chinese goods by 50% as of April 7 (ET). China has firmly opposed the move and warned it will retaliate to protect its interests if the escalation goes into effect.
Interestingly, China’s central bank increased its gold reserves by 90,000 ounces in March, the fifth straight month of gold accumulation. Amid rising trade tensions, central bank buying could continue to bolster gold’s long-term strategic value.
Gold – Technical Outlook
After rebounding to $3,054 in the Asian session, gold faced resistance and trended lower throughout the European and US sessions. It eventually dropped below $2,960 to find support near $2,956 before a slight recovery. The daily candlestick closed as a bearish hanging man, reflecting strong intraday pressure. Overall, gold has been in a pullback for three sessions since reaching a high of $3,167 last week.
Gold – Today’s Focus
- Strategy: Prefer short positions on rebounds, with selective long entries on pullbacks.
- Key Resistance: $3,000 – $3,010
- Key Support: $2,965 – $2,955
Oil Outlook
Oil prices also took a sharp hit on Monday. Fears that Trump’s latest tariffs could tip the global economy into recession and weaken energy demand dragged both WTI and Brent crude to their lowest levels since April 2021.
At the close:
- WTI May Futures: fell $1.29 (–2.1%) to $60.70/barrel
- Brent June Futures: dropped 2.09% to $64.21/barrel
During Monday’s session, crude briefly spiked by over $1 following a false report that Trump might pause tariffs for 90 days. The White House quickly denied the story, causing prices to reverse and resume their downward trend.
Investor concerns were further fueled after Saudi Aramco cut crude prices for Asian buyers. On April 6, the company lowered May’s official selling price for light crude to a $1.20 premium over the Oman/Dubai average, down from a $2.30 premium — the largest cut in over two years and the second consecutive month of price reductions.
Goldman Sachs also lowered its oil price forecasts, citing rising OPEC+ supply risks and the potential for a trade war-induced recession.
- Brent 2024 forecast: down 5.5% to $69/barrel
- WTI 2024 forecast: down 4.3% to $66/barrel
- Brent 2026 forecast: down 9% to $62/barrel
- WTI 2026 forecast: down 6.3% to $59/barrel
The bank also warned of further potential downgrades.
Oil – Technical Outlook
Oil declined in both the Asian and European sessions, briefly dipping below $59 before rebounding. In the US session, it spiked to $63.80 but couldn’t hold the gains and fell back to around $61 by the close. The daily candlestick formed a doji, signaling indecision but still within a broader bearish trend.
Oil – Today’s Focus
- Strategy: Favor short positions on rebounds, with limited long positions on dips.
- Key Resistance: $63.0 – $64.0
- Key Support: $60.0 – $59.0
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