Weekly Outlook (March 31 - April 4, 2025)

As we are in the middle of a critical week, global markets resemble a battlefield. The main agenda of the markets, especially, will be the "Customs Tariffs" that US President Donald Trump will announce on April 2! Trump aims to increase exports and reduce imports for America. However, there is a potential risk that inflation in the US economy may rise again as a result of the customs tariffs.

When we examine the details of US inflation data, we see that housing costs account for one-third of total inflation. Housing inflation, which had risen from 1.50% post-pandemic to 8% at the beginning of 2023, is now priced at approximately 4.20%. This indicates that inflation in the US economy has been on a downward trend over the past two years. Of course, as inflation decreases, the likelihood of Fed interest rate cuts increases. The growing probability of Fed rate cuts, especially during Trump‘s period of uncertainty, continues to boost demand for precious metals.

Gold, which started the year 2025 at $2,625 per ounce, closed Q1 2025 with a record high of $3,125, reflecting a positive premium. As we enter the new quarter, Trump‘s tariffs pose inflation, recession, or stagflation risks for the US economy, while continuing to drive demand for precious metals. With the increasing geopolitical risks, we may continue to see records in gold prices. In the short term, as tariffs are announced, some of the tariff risks might be priced in, leading to profit-taking in precious metals. However, in this case, we could view it as a buying opportunity in the market. Therefore, a short-term selling pressure might not change the positive medium and long-term trend.

On the macroeconomic front, in the US, the Q4 GDP data released last week was above expectations, showing a growth of 2.4%! With the US economy not yet in a recession, the positive growth data provides clues for the upcoming period.

Technically, in gold, prices above the psychological support level of $3,000-$2,960 support the continuation of positive movement. Trump‘s tariff process, the increased likelihood of Fed rate cuts, and the resurgence of geopolitical risks all support gold prices.

Of course, alongside the movements in gold, the price of gold in grams in Turkey has also reached historical record levels. With the interest rate cuts by the Central Bank of the Republic of Turkey (CBRT), risks have led to some upward movement in exchange rate policies, while gram gold prices in the Grand Bazaar have reached a new record, currently fluctuating between 3,840 and 3,800 TRY. In Turkey, premiums on gold per ounce have risen by about $30, while there is currently a difference of around $1,000 in kilogram prices compared to the London market.

According to CME Fed Watch, the probability of a 0.25 basis point rate cut in June is priced at 65%.