Weekly Outlook (April 7-11, 2025)

As we start a critical week, the markets greeted the week with what can be described as "Black Monday." Tariff uncertainties have gained some clarity. The U.S. has imposed tariffs of 34% on China, 20% on Europe, 26% on India, and 10% globally.

With the new tariffs, there is an expected slowdown in global economic activity, which has triggered a selling trend, especially in stocks and precious metals. A significant sell-off pressure was observed in silver prices in particular. This was due to the potential reduction in demand for silver, an industrial metal, based on the possibility of a global economic slowdown. In currency markets, while the U.S. Dollar Index continues to lose strength, the Japanese Yen (JPY) and Swiss Franc (CHF), considered safe-haven currencies, have shown stronger performance compared to other currencies.

As a result of the tariffs, markets are opening the door for the possibility of more rate cuts from the Fed in order to boost U.S. exports. At the beginning of the year, no interest rate cuts were expected from the Fed in 2025. However, now the markets are pricing in four rate cuts throughout 2025: 0.25 basis points in June, 0.25 basis points in July, 0.25 basis points in September, and another 0.25 basis points in December, totaling 100 basis points.

Gold, which started 2025 at $2,625 per ounce, closed the first quarter of 2025 with a record high of $3,125, marking a positive premium. As the new quarter begins, profit-taking in precious metals is observed with the announcement of tariffs. However, this can be seen as a buying opportunity in the market. In other words, short-term selling pressure may not change the positive trend for the medium and long term. Technically, for gold, prices above the psychological support level of $2,960 continue to support the positive movement. Factors such as the reflection of Trump‘s tariff process in recession pricing, the increasing possibility of Fed rate cuts, and the resurgence of geopolitical risks are supportive of gold.

On the macroeconomic front, the key focus for markets will be the inflation data, which will be released this Thursday in the U.S. If the inflation data comes in line with or below expectations, the likelihood of Fed rate cuts may increase again, potentially triggering upward movements, especially in precious metals.
Locally, in the Grand Bazaar, gram gold prices set a new record last week, reaching 3,900 TRY. In Turkey, premiums in terms of ounces have risen by up to $60, and the difference in kilograms has reached about $2,000 compared to the London market.
According to CME FedWatch, the probability of a 1.00% rate cut in December is priced at 37%.

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