On Tuesday (March 18), during the Asian session, spot gold remained stable near the $3,000 mark. On Monday, gold prices rose by 0.43%, closing at $3,000.83 per ounce, marking the first time it has stabilized above $3,000 in history. Weak U.S. economic data and geopolitical tensions provided safe-haven support for gold prices.
In February, U.S. retail sales data came in below expectations, growing by only 0.2%, far below the market expectation of 0.6%. January's data was revised down to a 1.2% decrease, the largest drop since November 2022. Consumers reduced spending on non-essential items amidst high inflation and economic uncertainty, increasing market concerns about the economic outlook. Additionally, the food service sector underperformed, with sales at restaurants and bars falling by 1.5%, the largest drop since 2024. The dollar index was under pressure, falling 0.3% on Monday to a low of 103.29, close to a six-month low, and eventually closing at 103.39.
The market is closely watching the Federal Reserve's upcoming release of its latest economic forecasts, with investors hoping to find clues about the future policy direction. Currently, the market generally expects the Fed to maintain interest rates this week and possibly hint at a rate cut in June. However, frequent adjustments to trade policy by the Trump administration, such as the announcement of tariffs followed by a suspension, have increased uncertainty about future policy directions.
On the geopolitical front, U.S. President Trump stated on Monday that Iran will be held accountable for the Houthi attack in the Red Sea. Meanwhile, U.S. military actions in the Middle East have further escalated. Last Saturday, the U.S. military launched a new round of airstrikes on the Houthi forces. The Houthi-controlled Al Masirah TV reported that the port city of Hodeidah and the Jawf province north of Sana'a were the main targets. Trump warned on his social media platform Truth Social that Iran will face "extremely severe" consequences for each Houthi attack. The Iranian Foreign Ministry stated that it would decide whether to accept Trump's invitation to talks after a comprehensive assessment.
Regarding the Russia-Ukraine conflict, U.S. President Trump announced plans to discuss with Russian President Putin on Tuesday about a ceasefire and peace agreement in the Ukraine war. Ukrainian President Zelensky acknowledged the U.S.-proposed 30-day temporary ceasefire as a positive step towards the peace process. On the other hand, Russian Deputy Foreign Minister Alexander Grushko emphasized that any peace agreement must include "ironclad" guarantees that Ukraine will not join NATO, but did not explicitly respond to the ceasefire proposal.
On this trading day, the market will also focus on U.S. February new home construction data, building permit data, import price index, and industrial production monthly rate, which may further influence market trends.
