empty
04.04.2025 09:09 AM
The Growth of the Gold Price Has Stopped. What Is the Reason? (There Is a Possibility of a Local Corrective Pullback in #SPX and Bitcoin)

The global market crash triggered by the announcement of sweeping tariffs personally introduced by the U.S. President continues into Asian trading sessions. While the decline has slowed, there is still no sign of this trend weakening. Interestingly, gold prices have been behaving unusually and inconsistently in recent months. What's the reason?

In most countries, the atmosphere in markets and political circles can be best described as one of shock and awe. The onset of a widespread trade war between the U.S. and nearly the entire world has underscored America's true standing in the global hierarchy, which, despite internal divisions, remains pivotal. All global markets—stocks, currencies, cryptocurrencies, and commodities—reacted negatively to the so-called "day of liberation," resulting in a significant plunge. The U.S. dollar also fell sharply in response.

But in such a situation, something should have received support. So where did the money flow—even temporarily?

The primary beneficiary of the current situation has been government bonds, which saw a sharp increase in prices amid rising demand for safe-haven assets, resulting in falling yields. Investors rushed into the debt market, hoping to preserve some of their capital. U.S. Treasury yields plunged below 4%. German Bunds and British, French, and other developed nations' bonds followed the same trend. Demand for government bonds from economically developed countries surged, pushing yields down. Bond yields—particularly government ones—are calculated inversely: as prices rise, yields fall, and vice versa.

What about gold? Where does it stand, and why hasn't it emerged as a traditional safe-haven asset?

Indeed, gold is traded in U.S. dollars. The dollar has plummeted, so gold should have logically surged—but it hasn't. Traditionally, interest in gold as a safe haven grows in market chaos and geopolitical tension. But not now. Here's how I would explain it. First, gold prices are already in the stratosphere—true, though not the main reason, in my view.

The second reason is the sharp increase in gold reserves stored in COMEX warehouses across the U.S. in recent months, driven by fears that rising tariffs could disrupt supply. However, after the announcement that precious metals would not be subject to President Trump's "reciprocal" tariffs, demand for gold has been limited. That said, a significant drop in gold prices is unlikely. Most likely, the metal will consolidate near its recently reached highs. Fears of the inflationary impact of tariffs globally, combined with central bank purchases and strong demand for gold-backed ETFs, have helped contain the downside.

So, what can we expect from gold price dynamics?

I believe not much. A large-scale sell-off is unlikely. On April 5—tomorrow—we expect the "second act" of the drama, with Trump potentially announcing a new wave of tariffs. Since their scope is still unclear, today's negative trend in the markets may subside. We may even witness a short-term rebound in financial assets as positions are partially closed.

Today's U.S. jobs report will be released, but markets likely won't react enthusiastically, just as they haven't in recent weeks. The main focus remains on tariffs, the threat of global recession, and other issues triggered by the U.S. under President Donald Trump.

This image is no longer relevant

This image is no longer relevant

Daily Forecast:

#SPX

The CFD contract for the S&P 500 futures has paused its decline in anticipation of new tariff announcements expected from Donald Trump tomorrow. In this wave, the contract might experience an upward correction as some short positions are closed. If the price moves above 5407.00, it may trigger limited growth. A potential entry point could be the 5416.62 level.

Bitcoin

The cryptocurrency remains within a broad sideways range. A pause in market turmoil following the recent crash could lead to a local rise toward the 84,773.73 level. A potential entry point could be the 83,646.26 level.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

EUR/GBP. Analysis and Forecast

However, at this point, it lacks follow-through buying, despite a fundamental backdrop that suggests the path of least resistance for spot prices lies to the upside. The weak performance

Irina Yanina 11:38 2025-06-11 UTC+2

Results of the Second Round of U.S.–China Negotiations

The United States and China have concluded two days of important trade negotiations with a plan to resume the flow of sensitive goods — this framework now awaits approval from

Jakub Novak 11:32 2025-06-11 UTC+2

The U.S. and China: A Small Step Forward. What's Next? (Potential for a reversal and decline in EUR/USD and NZD/USD pairs)

Representatives from the United States and China have reached a framework agreement on trade following two days of high-level talks in London. But why isn't there a sense of euphoria

Pati Gani 09:52 2025-06-11 UTC+2

The Market Approaches Its Rubicon

The devil is in the details—and the U.S. and China haven't provided investors with those details regarding their newly reached deal. This lack of transparency risks cutting off the momentum

Marek Petkovich 09:18 2025-06-11 UTC+2

What to Pay Attention to on June 11? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic reports are scheduled for Wednesday. Therefore, any sharp reversal or strengthening of movement may only occur at the start of the U.S. trading session, when

Paolo Greco 06:10 2025-06-11 UTC+2

GBP/USD Overview – June 11. What Will Inflation Influence?

The GBP/USD currency pair fell sharply in the first half of Tuesday but retraced back to its original position in the second half. Traders may have assumed in the morning

Paolo Greco 03:31 2025-06-11 UTC+2

EUR/USD Overview – June 11: Even News About Negotiations Doesn't Help the Dollar

The EUR/USD currency pair continued trading sluggishly on Tuesday, maintaining an upward bias. The macroeconomic backdrop has been absent for two days in a row, but there have been some

Paolo Greco 03:31 2025-06-11 UTC+2

Japan Hopes for a Positive Outcome in Trade Negotiations—Otherwise, Recession and Rising Inflation Loom

The revised estimate of Japan's Q1 GDP showed that the economy contracted less than previously estimated, with consumption figures also revised upward. GDP declined by 0.2% year-over-year instead

Kuvat Raharjo 00:21 2025-06-11 UTC+2

GBP/USD: Labor Market Cools Down, But the Pound Holds Its Ground

The UK labor market data published on Tuesday turned out to be unfavorable for the pound. However, the GBP/USD pair is not rushing to dive downward, as the overall weakness

Irina Manzenko 00:21 2025-06-11 UTC+2

The Dollar Is Doomed, Though It Doesn't Know It Yet

In war, all methods are justified. U.S.–China trade negotiations are ongoing in London, and everything is being utilized—from education to rocket engines. Washington is prepared to make concessions, including lifting

Marek Petkovich 00:21 2025-06-11 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.