As we start a critical week, the markets greeted it with what can be described as a "Black Monday." Tariff uncertainties have gained some clarity. The U.S. imposed tariffs of 34% on China, 20% on Europe, 26% on India, and 10% globally.
With the new tariffs, the global economic activity is expected to slow down somewhat, leading to a selling trend in markets, starting with stocks and extending to precious metals. We particularly observed significant selling pressure on silver prices. This was due to the potential reduction in demand for silver, an industrial metal, caused by the likelihood of a global economic slowdown. In the currency markets, while the Dollar Index continued to lose strength, the Japanese Yen (JPY) and Swiss Franc (CHF), considered safe-haven currencies, showed stronger performance compared to other currencies.
As a result of the tariffs, markets have begun to consider the possibility of more interest rate cuts by the Fed to boost U.S. exports. At the beginning of the year, the market did not expect any interest rate cuts from the Fed for 2025. However, currently, the market anticipates four rate cuts from the Fed in 2025. A 0.25 basis point cut is expected in June, another 0.25 basis point in July, 0.25 basis points in September, and 0.25 basis points in December, totaling 100 basis points in cuts.
Starting at $2625 in 2025, gold prices closed the first quarter of 2025 with a positive premium at $3125. As we entered the new quarter, with the announcement of the tariffs, profit-taking in precious metals was observed. However, this situation can be seen as an opportunity for buyers. In other words, while the short-term selling pressure might not change the positive trend in the medium and long term, it still provides a buying opportunity. Technically, for gold, prices above the psychological support level of $2960 continue to support the positive movement. Factors such as Trump's tariff process reflecting a slowdown in the markets, the increased likelihood of Fed interest rate cuts, and the resurgence of geopolitical risks are supporting gold prices.
On the macroeconomic front, U.S. inflation data, which will be announced this Thursday, remains the main focus of the markets. If the data comes in line with or below expectations, the possibility of Fed rate cuts could increase again, which could trigger upward movements in precious metals.
Locally, in the Grand Bazaar, the gram gold price set a record last week at 3900 TRY. In Turkey, the premiums for gold in terms of ounces have risen by $60, and the difference in kilograms compared to the London market is around $2000.
According to CME FED Watch, the likelihood of a 1.00 basis point rate cut in December is priced at 37%.
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