Key Points
Trump’s new tariff policy sparked a global flight to safe-havens like the Japanese Yen and gold.
Strong U.S. jobs data was overshadowed by deepening recession concerns and inflation anxiety.
This week’s CPI and FOMC Minutes could set the tone for Q2 monetary policy and risk sentiment.
Market Recap: Volatility Took the Wheel
Last week opened with high-impact policy headlines. President Donald Trump announced sweeping reciprocal tariffs, a flat 10% on all imports, with some nations, like Japan, seeing levies as high as 24%. The global market reaction was swift and risk-averse. Equity markets fell sharply, the Japanese Yen surged, and gold spiked above $3,160 as traders moved into safety.
Friday’s Nonfarm Payrolls report added fuel to the mix. With 228,000 jobs added, it was an upside surprise. But it didn’t calm recession fears. Treasury yields continued to slip and June rate cut bets grew stronger.
Markets are now torn between strong labor prints and deteriorating macro signals, including rising trade tensions and inflationary risks.
This Week’s Key Events: Eyes on Monetary Policy
FOMC Minutes – Wednesday, April 10
Why it matters:
Markets are already pricing in multiple rate cuts this year. But are all Federal Reserve members on the same page?
What to watch:
Are Fed members expressing concern about tariffs and inflation pass-through?
Does the language hint at preparedness for a June rate cut, or more data dependency?
Trading Insight:
If the minutes show internal disagreement, expect a spike in volatility. Initial USD strength could follow any hawkish commentary, but dovish signals, especially regarding downside risks, could reinforce expectations for three rate cuts this year.
U.S. CPI (Consumer Price Index) – Thursday, April 11
Why it matters:
CPI is the linchpin for Fed policy. Core inflation has remained sticky, and the Fed has made it clear: no cuts until there's evidence inflation is sustainably easing.
Forecasts (Year-over-Year):
Core CPI: 2.6%
Previous: 2.8%
Trading Insight:
A hotter-than-expected print will challenge the rate cut narrative and support a USD rebound. But a softer CPI figure will open the door wide for a June cut, and markets will likely celebrate with renewed strength in gold and the yen.
A cooler CPI coupled with dovish FOMC minutes would form a powerful risk-on signal. Expect USD selling across majors and another attempt by gold to retest ot its All Time Highs.
Powell’s Next Speech Could Mean Something
If Powell avoids leaning into inflation worries and shifts focus toward lagging effects or credit stress, expect the market to double down on dovish expectations. Conversely, if he emphasizes the 2% target with no room for compromise, that could give the USD some relief, albeit temporary, if macro data continues to soften.
Real-time messaging matters more than ever. Traders will surely dissect every word from the Fed this week for clarity on how officials are interpreting tariff impacts, labor strength, and inflation.
Updated Technical Outlook on GOLD
XAU/USD (GOLD) LEVELS
Gold is currently trading around $3,025, pulling back from its all-time high of $3,167. The yellow metal experienced a sharp correction over the last two sessions but has so far held above a crucial confluence zone near $3,000, which aligns with both the psychological level and long-standing trendline support. This zone remains pivotal. A decisive break below $3,000 could open the door for a deeper correction toward $2,955, followed by stronger support between $2,830 and $2,817, which held as a consolidation base during February.
On the upside, immediate resistance is now seen at $3,050, the previous support turned short-term ceiling. A clean break above that could reignite momentum toward $3,116, and possibly retest the all-time high at $3,167, especially if upcoming U.S. inflation data (CPI) cools more than expected, reinforcing the case for Fed rate cuts and boosting gold’s safe-haven demand.
The Relative Strength Index (RSI) has cooled from extreme levels and now prints near 52.20, suggesting the recent dip was more of a momentum reset than a reversal. As long as price action holds above $3,000, gold remains in a bullish structure. However, failure to defend this zone could shift the short-term tone more neutral to bearish.
Final Thoughts
This is a decisive week for market sentiment. The rally in gold and the yen isn’t just technical, it’s rooted in fear, forward-looking policy divergence, and doubts about U.S. economic stability amid escalating trade conflict.
With CPI and the FOMC Minutes back-to-back, traders should brace for volatility. But volatility also creates opportunity. Just follow the narrative, and watch price action closely around key inflection zones.
The Fed has a balancing act ahead. This week might reveal whether they’re prepared to act, or still hoping the economy holds up under pressure.