Forex Today: Gold hits yet another record high to start the week
Here is what you need to know on Monday, April 8:
Gold preserved its bullish momentum and hit a new all-time high above $2,350 at the weekly opening after gaining over 4% in the previous week. Sentix Investor Confidence data for April will be featured in the European economic docket and the US calendar will not offer any high-impact data releases on Monday.
Forecasting the Coming Week: Markets maintain focus on inflation.
The data from the US showed on Friday that Nonfarm Payrolls (NFP) rose 303,000 in March and the Unemployment Rate edged lower to 3.8% from 3.9% in February. Both of these prints came in better than analysts' estimates and helped the US Dollar (USD) stay resilient against its major rivals heading into the weekend. According to the CME FedWatch Tool, markets are pricing in a 52% probability that the Fed will leave the policy rate unchanged at the June policy meeting, up from nearly 40% before the jobs report.
US Dollar price today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.01% | -0.02% | -0.04% | -0.19% | 0.10% | -0.16% | 0.09% | |
| EUR | 0.01% | -0.01% | -0.03% | -0.17% | 0.11% | -0.14% | 0.09% | |
| GBP | 0.01% | 0.01% | -0.02% | -0.19% | 0.12% | -0.14% | 0.11% | |
| CAD | 0.03% | 0.03% | 0.02% | -0.14% | 0.13% | -0.11% | 0.13% | |
| AUD | 0.19% | 0.18% | 0.17% | 0.15% | 0.29% | 0.03% | 0.26% | |
| JPY | -0.10% | -0.11% | -0.12% | -0.13% | -0.28% | -0.24% | -0.01% | |
| NZD | 0.16% | 0.14% | 0.14% | 0.11% | -0.04% | 0.25% | 0.23% | |
| CHF | -0.09% | -0.10% | -0.11% | -0.13% | -0.28% | 0.01% | -0.25% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
The US Dollar Index holds comfortably above 104.00 in the European morning on Monday and the benchmark 10-year US Treasury bond yield stays in positive territory above 4.4%. Meanwhile, US stock index futures trade marginally lower.
EUR/USD staged a late rebound after dipping below 1.0800 on Friday and closed the week in positive territory. The pair moves up and down in a tight channel below 1.0850 early Monday.
GBP/USD stabilized above 1.2600 following a volatile American session on Friday and ended the week with small gains. The pair holds steady at around 1.2620 in the early European session.
Gold staged a correction and erased a large portion of its daily gains following the record-setting rally. XAU/USD was last seen trading modestly higher on the day near $2,040.
USD/JPY reversed its direction after falling below 151.00 on Friday and ended the day in positive territory. The pair continues to inch higher on Monday and closes in on 152.00.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.