Posted on 04/21/2025 8:50:10 AM PDT by Miami Rebel
Key Events: US Dollar Index (DXY) drops to 98 amid reports Trump plans to restructure the Fed EURUSD surges above 1.15, Gold nears 3,400, and GBPUSD approaches 1.34 China threatens with retaliatory tariffs to nations aligning with US trade policy IMF Spring Meetings kick off amid heightened trade negotiations and global economic uncertainty Markets stumbled in early Monday trading following news that Trump may attempt to overhaul the Federal Reserve. Although it is illegal for a sitting president to fire the Fed Chair, the attacks have raised concerns about the independence and stability of US monetary policy, driving the Dollar Index (DXY) lower toward the 98-support, while global markets reacted sharply:
EURUSD climbs beyond 1.15 Gold rallies toward 3,400 GBPUSD challenges 1.34 USDJPY slides into the 140 zone US indices fall by 1%
The DXY is losing momentum, sinking below the 98 threshold and eyeing further support at 97.70, 96, and 92.30—levels aligning with the lower bound of a channel originating from the 2008 lows. A reversal above 99 or 101 could reignite bullish sentiment amid ongoing volatility.
While GBPUSD and USDJPY test levels last seen in September 2024, EURUSD and DXY hover around 3-year extremes, near critical technical levels that may define the next major trend. The Dollar’s weakness is further exacerbated by deepening US–China trade tensions, which continue to erode global market confidence. Recent actions from China include:
Cutting US commodity imports—including liquefied natural gas and wheat—to near zero as per March reports Issuing warnings to other nations against aligning with US trade policy, under threat of retaliatory tariffs In addition, unresolved geopolitical conflicts in the Middle East and Eastern Europe (Russia–Ukraine) are sustaining upward pressure on gold prices, which are now approaching $3,400 per ounce.
On a monthly chart, gold’s overbought momentum echoes historic crisis periods such as 2020 and 2008. Despite this, the metal remains supported by its safe-haven appeal, especially as macro risks persist. Meanwhile, DXY's weekly momentum reflects oversold territory akin to 2020 levels, though further downside is visible on its monthly time frame.
EURUSD is trading near its November 2021 highs, reaching 1.1567 today. While weekly momentum shows overbought conditions similar to 2020, monthly indicators suggest further upside potential—possibly short-lived—toward 1.1620, 1.1750, 1.2050, and 1.2360.
Should market confidence recover and momentum reverse, key support zones to watch include 1.1280, 1.1140, 1.1000, and 1.0920. These levels could either recharge bullish momentum into 2025 or signal a deeper pullback toward 1.08 and below.
Gold is rallying on a combination of safe haven flows and Dollar weakness, approaching the $3,420 resistance. While momentum is elevated—resembling crisis-era extremes—further gains are possible amid continued uncertainty. f $3,420-$3450 zone holds, aligning with key Fibonacci extensions (drawn from the 2018 lows, 2020 highs, and 2022 lows), and trendline connecting 2016 and 2020 peaks, gold could follow through on its cup and handle breakout pattern toward $3,700 and $4,000.
However, any geopolitical resolution or easing of trade tensions could trigger a sharp reversal, with potential downside levels at $3,000, $2,960, $2,900, and $2,800.
World Street is Democrat country now.
Isn’t this reaction to a tiny tariff one of the most ridiculous things ever?
Bond rates are NOT rising due to a tight Fed. Without the trade carnage they’d be falling.
The world economy is $109 trillion. So someone explain how a TINY US import tariff that might bring in $400 billion could cause giant upheavals in world markets? This is all engineered/rigged to get Trump.
Money is money is money. It doesn’t vote.
If you look at overall political contributions from the industry, it is solidly Republican. But that doesn’t influence how funds invest.
Regardless of a fund manager’s persuasion, he is judged by results. If you’re diehard conservative but your MAGA manager underperforms the market, you’d fire him.
But now that Trump is doing something Wall Street doesn’t like, he won’t lift a finger and we are told Trump will be punished by the “bond vigilantes,” or even worse, Powell will sit by and allow bond rates to rise because other countries are acting against the US and dumping bonds.
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I wouldn’t sweat the bond vigilantes because IMO they don’t actually exist, also, if they did exist they haven’t done squat at squelching the massive debt spending by governments all over the globe since ........ forever.
Right now, institutions all over the globe don’t have a clue where they’re are going to make the ROI they’re use to making.
Hence, the stormy markets.
Why don’t they just keep it?
Sell high buy low repeat.
It will drop once Trumps Tariff plans are settled it’s not far away countries are doing a lets make a deal now.
If that is reduced and US wages have to rise and real productive investment is made here, that's a win. And I realize that's not going to happen overnight.
My retirement funds have taken a beating like everyone else's, but I'm willing to suffer that if it produces real change.
With a significant recovery a few years out. The only way I get made is they don't follow through on all the reforms, making the suffering for naught.
I was just kidding. Professional Gold Traders don’t care where the price goes, they make money off the spread no matter what the price is.
Yep. I’ll be adding to my positions in the best stocks in world. I’ve been 75% T-Bills for months.
Professional Gold Traders are not the most in the gold game.
They seem like such nice people, willing to trade me their precious gold for my soon to be worthless dollars!
Now I'm not averse to holding gold. In fact, we converted a substantial amount of our retirement savings into a Gold IRA, in an effort to diversify our total wealth. That is the IRA we plan to draw on when the stocks are in decline, so that we can give them time to recover.
But a lot of these gold hawkers adversiting online or on talk radio seem a little shady to me. I would question the purity of the gold you receive from them. Maybe others can share their experience.
Yep. I’ll be adding to my positions in the best stocks in world. I’ve been 75% T-Bills for months.
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Good move on your part, when you’re an old moss back animal in the investment world.....you’ve seen it all before.
“Happy Hunting.”😀
Quite right. We are in for some veery hard economic times.
Sam, I’m a complete amateur when it comes to gold but if I wanted to buy some I would try to figure out who is charging the lowest markup above the current price at any one moment.
My macro view right now would be that gold has had a heck of a run, any downturn in the VIX (the fear gauge) might lead to a correction as people take profits from the latest runup.
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