Forex News

• Gold prolongs its downtrend for the fourth day and drops to a fresh YTD low at the start of a new week.
• Major central banks adopt a hawkish stance amid inflation concerns and weigh on the commodity.
• Rising geopolitical tensions could support the safe-haven XAU/USD, though the upside seems limited.

Gold (XAU/USD) bounces off a technically significant 200-day Simple Moving Average (SMA) during the first half of the European session on Monday and trims a part of its heavy intraday losses to a four-month low. Any meaningful recovery, however, still seems elusive in the wake of hawkish stances from major central banks, which tend to undermine demand for the non-yielding yellow metal.

The Bank of Japan (BoJ) maintained ​its bias toward monetary policy normalization and warned that surging Crude Oil prices driven by the Middle East conflict could exacerbate inflationary pressures. Adding to this, the Bank of England (BoE) signaled a hawkish shift and potential interest rate hikes as early as April due to inflation stemming from the Iran war. Furthermore, the European Central Bank's (ECB) hawkish messaging suggested that policymakers were prepared to act as soon as April 30 if price pressures intensify due to rising geopolitical tensions.

Meanwhile, the US Federal Reserve (Fed) raised the year-end inflation outlook (PCE), citing risks from higher energy prices due to the Iran war, and projected only one interest rate reduction this year, and one in 2027. This remains supportive of elevated US Treasury bond yields and continues to act as a tailwind for the US Dollar (USD), which turns out to be another factor exerting downward pressure on the Gold price. However, a further escalation of geopolitical tensions lend some support to the safe-haven precious metal amid extremely overbought conditions.

In the latest developments, US President Donald Trump issued a 48-hour deadline for Iran to reopen the Strait of Hormuz and threatened to target Iran's energy infrastructure if the demand is not met. Iran responded by threatening to escalate strikes on energy infrastructure and target critical water desalination facilities across the Middle East, should Trump make good on a promise to “obliterate” the country’s power plants. This, in turn, makes it prudent to wait for acceptance below the $4,100 mark before positioning for any further depreciating move.

XAU/USD daily chart

Gold defends 200-day SMA pivotal support amid extremely oversold daily RSI

The near-term bias turns bearish as the XAU/USD pair extends a sharp decline away from the recent $5,300 area and tests the rising 200-day Simple Moving Average (SMA) near $4,095, which acts as the next dynamic support gauge. The Moving Average Convergence Divergence (MACD) indicator (12, 26, 9) remains below the signal line and deep in negative territory, with an expanding negative histogram that reinforces persistent downward momentum.

However, the Relative Strength Index (RSI) at 24 signals oversold conditions, but its steady slide from above 60 indicates firm selling pressure rather than an immediate stabilization. Initial resistance emerges at the $4,500 region, where prior price action consolidated before the latest breakdown, followed by a stronger barrier near $4,820, aligning with a recent swing low that turned lower high on the way down.

On the downside, immediate support is located around the 200-day SMA at $4,095, and a clear break below this level would expose the $4,000 psychological area as the next support. A sustained recovery above $4,500 would be needed to ease the current bearish tone and open the way back toward $4,820, while failure to hold above $4,095 keeps the path open for deeper losses toward $4,000.

(The technical analysis of this story was written with the help of an AI tool.)

Deutsche Bank economists argue that the US is relatively shielded on growth from the current energy shock due to its net energy exporter status, but still faces a notable inflation impulse. They estimate that WTI at $100/bbl could add about 1.25 percentage points to headline CPI, lifting it near 4% in May, while warning of non‑linear growth effects at much higher Oil prices.

Growth resilience with rising CPI impact

"The US is relatively insulated from a growth perspective given its status as a net energy exporter, although it will still face higher inflation."

"A move to $100/bbl in WTI (roughly Friday’s close) adds around 1.25pp to headline CPI, potentially pushing CPI to around 4% in May."

"That said, the effective “energy tax” on consumers is partly offset by higher tax receipts at current oil prices."

"The key risk is that growth effects become increasingly non linear in the $130–150/bbl range."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

MUFG’s Senior Currency Analyst Lee Hardman reports that Gold and other precious metals are under pressure despite heightened geopolitical risks. Gold has lost nearly a quarter of its value since the Middle East conflict began and is approaching its 200-day moving average support near USD 4,090/ounce. Position liquidation and hawkish central bank repricing are cited as key drivers of the ongoing correction.

Precious metals slide toward key support

"At the same time, the price of precious metals including gold and silver have continued to correct sharply lower."

"The price of gold has lost almost a quarter of its value since the Middle East conflict began, and has fallen back towards support from its 200-day moving average at around USD 4,090/ounce."

"Position liquidation and the hawkish repricing of central bank rate expectations have weighed on precious metal prices."

"The price of gold has failed to benefit so far from heightened geopolitical risks and stagflation fears."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• USD/KRW edges lower after recording a 17-year high of 1,516.76 on Monday.
• Rising risk aversion led to foreign outflows, weighing on the South Korean Won.
• Heavy oil import reliance leaves KRW vulnerable to Middle East supply disruptions.

USD/KRW trades around 1,510.00 during the European hours after retreating from a 17-year high of 1,516.76 reached earlier on Monday. Heightened risk aversion triggered foreign outflows of 1.8 trillion Won, putting downward pressure on the South Korean Won (KRW).

The KRW faces pressure after Saudi Aramco, the world’s largest oil exporter, cut crude shipments to Asian buyers for a second straight month in April, as the US-Israel conflict with Iran disrupts flows through the Strait of Hormuz. Supplies are being limited to Arab Light crude shipped from the Red Sea port of Yanbu, tightening feedstock availability for Asian refiners and constraining output. South Korea’s heavy reliance on energy imports, accounting for over 90% of its oil needs, makes the domestic currency particularly vulnerable to Middle East supply disruptions.

Meanwhile, the USD/KRW pair advances as the US Dollar (USD) strengthens on rising safe-haven demand amid escalating Middle East tensions. The Greenback is further supported by higher oil prices, which are fueling inflation concerns and reinforcing the Federal Reserve’s (Fed) hawkish stance. Markets are increasingly pricing in the likelihood of a Fed rate hike toward year-end.

At its March meeting, the Fed voted 11–1 to keep interest rates unchanged within the 3.50%–3.75% range, marking a second straight hold after a series of cuts in late 2025. Meanwhile, futures markets indicate an 85.5% probability that rates will remain unchanged at the April meeting, according to the CME FedWatch tool.

Societe Generale economists argue that Oil demand remains structurally inelastic despite sharp price gains. They estimate short‑run crude demand elasticity at –0.024, implying around 1.2 mb/d of lost demand so far, and warn that a move toward $150/bbl could destroy up to 2.7 mb/d of consumption.

High prices trigger gradual demand response

"Oil demand remains structurally inelastic, but high prices are now forcing incremental cuts in Asia. Japan, Korea, Taiwan, China and India are trimming runs, declaring force majeure, or prioritising household fuel use. From a quantitative perspective, we estimate the short run price elasticity of crude oil demand at –0.024."

"With prices up 47% since the start of the conflict and global demand at 104.8 mb/d, this implies a decline of roughly 1.2 mb/d. Gasoil/diesel shows the largest volumetric sensitivity, with an estimated elasticity of –0.027, suggesting demand could fall by around 400 kb/d. Jet fuel and naphtha exhibit the highest elasticities in absolute terms: –0.045 and –0.042, respectively."

"As we move into April with no resolution to the conflict in sight, we may soon be compelled to adopt our alternative Scenario B, which assumes a more prolonged disruption."

"If prices rise toward $150/bbl under our alternative scenario, we estimate that as much as 2.7 mb/d of demand could be destroyed, including approximately 900 kb/d from gasoil/diesel alone."

"These developments illustrate a broader truth: while oil demand typically responds only slowly to price changes, the magnitude and speed of this disruption are forcing incremental adjustments across multiple sectors—and the list is growing by the day."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• EUR/USD declines to near 1.1535 as the US Dollar gains amid Middle East conflicts.
• Iran vows to retaliate against Trump’s 48-hour ultimatum.
• The ECB could deliver interest rate hikes in the next two policy meetings.

The EUR/USD pair weakens as the US Dollar (USD) trades higher due to escalating Middle East conflicts, trading 0.3% lower to near 1.1535 during the European trading session on Monday. The US Dollar gains as Middle East conflicts, which involve the United States (US), Israel, and Iran, have increased the demand for safe-haven assets.

At the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.35% higher to near 99.90.

Conflicts in the Middle East have escalated as Iran vows the indefinite closure of the Strait of Hormuz and attacks on regional infrastructure belonging to the US and Israel against President Donald Trump’s 48-hour ultimatum.

Over the weekend, US President Trump threatened attacks on Tehran’s power plants through a post on Truth.Social, if it doesn’t open Hormuz within the next 48 hours.

Meanwhile, the Euro (EUR) trades lower as surging energy prices in the Eurozone are expected to diminish households’ purchasing power. On the monetary policy front, Goldman Sachs expects the European Central Bank (ECB) to raise interest rates in April and the June policy meetings. Last week, the ECB left interest rates unchanged.

EUR/USD technical analysis

EUR/USD trades lower at around 1.1535 as of writing. The near-term bias is bearish as spot holds below the descending 20-day Exponential Moving Average (EMA), which is around 1.1600 and acting as dynamic resistance after the recent breakdown from the mid-1.16 area. Price action has set a sequence of lower highs and lower closes from the 1.18 zone, while the RSI at 42 remains below the 50 midline, confirming persistent downside momentum rather than a completed correction.

Initial resistance emerges at the 20-day EMA, followed by the March 10 high of 1.1667. A daily close above the latter would be needed to challenge the broader bearish structure. On the downside, immediate support sits at 1.1500, guarding the recent low at 1.1415; a break below 1.1415 would open the way toward the 1.1350 region as the next bearish target zone.

(The technical analysis of this story was written with the help of an AI tool.)

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Commerzbank’s Michael Pfister highlights that the Pound has held up despite a weak UK real economy, persistent inflation and strained public finances, helped by reduced political risk and aggressive Bank of England (BoE) repricing from cuts to multiple hikes. He warns that tighter policy in a supply-driven inflation shock and fragile backdrop is ultimately negative for GBP, expecting higher EUR/GBP to extend in coming weeks.

BoE repricing turns into Sterling headwind

"Over the past few weeks, I have often wondered how much longer the pound can continue to weather the current market developments so well. After all, the real economy has been struggling for quite some time, inflation has not yet returned to pre-2022/23 levels, and public finances are under strain, as is the case in many other industrialised nations. In fact, the UK is arguably the country least able to afford the current oil price shock."

"The fact that the pound has nevertheless fared well over the past few weeks is likely due to two factors. First, political risks have been priced out following Labour’s loss of an otherwise safe constituency at the end of February. Secondly, there has been a reassessment of central bank expectations: instead of two interest rate cuts, more than three rate hikes are now expected by the end of the year."

"However, interest rate hikes are not necessarily positive in a context of strained public finances (the deficit is already widening due to higher interest costs) and a struggling real economy. While a central bank should respond to an inflation shock with a more hawkish monetary policy, should it do so immediately with three rate hikes in the case of a supply-driven rise?"

"For us, Friday’s higher EUR-GBP levels therefore came as no surprise. We see a greater likelihood that this trend could continue in the coming weeks."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• The Indian Rupee refreshes lifetime lows at 94.40 against the US Dollar amid Middle East tensions.
• Iran pledges indefinite closure of Hormuz and attacks on regional infrastructure.
• FIIs continue to sell their stake on the Indian stock market.

The Indian Rupee (INR) extends its downfall against the US Dollar (USD) at the start of the holiday-shortened week. Indian markets will remain closed on Thursday due to Shri Ram Navami.

The USD/INR pair posts a fresh lifetime high at 94.40 as the Indian Rupee faces the heat of conflicts in the Middle East, which have escalated following United States (US) President Donald Trump’s ultimatum to Iran to reopen the Strait of Hormuz within 48 hours, as relayed on Truth Social.

Iran vows retaliation against Trump's 48-hour ultimatum

US President Donald Trump said on Saturday that they will “obliterate” Iran’s power plants, starting with the biggest one, if they refuse to open the Strait of Hormuz within 48 hours.

Meanwhile, Iran has responded with threats of indefinite closure of the Strait of Hormuz and targeting all infrastructure of energy, information technology (IT), and desalination facilities in the region belonging to the US and Israel, The Politico reported.

Escalating conflicts in the Middle East have dampened demand for riskier assets, forcing investors to shift to safe-haven assets. Asian stock markets have bled due to the Iran conflict, with the Nifty 50 slumping almost 2.5% to a fresh over 11-month low near 22,550.

Amid Middle East conflicts, the US Dollar (USD) trades slightly higher, with the US Dollar Index (DXY) rising 0.15% to near 99.65. The US Dollar has been broadly firm as investors expect the Federal Reserve (Fed) to adopt an extended pause on interest rates, with inflation expectations de-anchoring due to higher energy prices.

FIIs selling roils Indian stock market

Overseas investors continue to dump their stake in the Indian stock market amid the war in the Middle East. So far in March, Foreign Institutional Investors (FIIs) have remained net sellers on all trading days and offloaded their stake worth Rs. 86,780.89 crore.

FIIs are keeping a distance from the Indian equity market amid fears that higher oil prices due to energy supply disruption would result in lower earnings reports by Indian companies in the fourth quarter of FY 2025-26 than previously estimated.

Meanwhile, oil supply to the Asian region will be squeezed further as Saudi Aramco, the world's top oil exporter, cut crude supply to Asian buyers for a second month ‌in April after the US-Israeli war with Iran disrupted trade via the Strait of Hormuz.

This week, investors will focus on the preliminary India and US private sector Purchasing Managers’ Index (PMI) data for March, which will be released on Tuesday.

Technical Analysis: USD/INR extends winning streak for fourth trading day on Monday

USD/INR jumps above 94.40 on Monday. The near-term bias is bullish as price extends a steep advance above the rising 20-day Exponential Moving Average, which now trails well below spot and confirms an established uptrend.

Recent candles show no meaningful retracement despite the sharp climb, and momentum remains strong, with the 14-day Relative Strength Index (RSI) at 81.56 in overbought territory, signaling persistent buying pressure rather than immediate exhaustion.

The sequence of higher highs and higher lows over recent sessions reinforces the upside bias, while the absence of rejection wicks at the top of the range points to sustained demand on dips.

Initial resistance is now seen near 94.50, where intraday supply could emerge, followed by a higher barrier toward 95.00 as the next upside reference if bulls maintain control. On the downside, immediate support aligns around 94.00, where minor consolidation recently formed, ahead of firmer support at 93.50. The 20-day EMA near 92.60 underpins the broader bullish structure and marks a deeper pullback area that would need to hold to preserve the current uptrend.

(The technical analysis of this story was written with the help of an AI tool.)

• Silver price recorded its 15-week low of $61.01 on Monday.
• The 14-day Relative Strength Index at 28.92 is in oversold territory, highlighting strong selling pressure.
• Silver price may find its initial barrier at the nine-day EMA of $74.68.

Silver price (XAG/USD) continues its losing streak for the fifth consecutive day, down by nearly 5%, and is trading around $64.60 per troy ounce during the European hours on Monday. The technical analysis of the daily chart timeframe shows that the metal price moves downwards within the descending channel pattern, suggesting a persistent bearish bias.

The near-term bias turns bearish as price slips decisively below the 50-day Exponential Moving Average (EMA) and extends its decline away from the nine-day EMA, confirming persistent downside pressure after a protracted consolidation phase.

The 14-day Relative Strength Index (RSI) is at 28.92, in oversold territory, underscoring strong selling momentum, though it also signals that the current leg lower has approached stretched conditions, with further direction hinging on how price reacts to nearby resistance on any rebound.

On the downside, the silver price recorded its 15-week low of $61.01 on Monday. Further declines would open the doors for the white metal price to explore the region around the lower boundary of the descending channel, around $21.00.

Silver price may rebound toward the nine-day EMA at $74.72, followed by the upper descending channel boundary near the 50-day EMA at $80.36. A break above this confluence resistance zone would cause the emergence of the bullish bias and support the XAG/USD pair to explore the region around the all-time high of 121.66, which was recorded on January 29.

(The technical analysis of this story was written with the help of an AI tool.)