Weekly Outlook: February 3-7, 2025

Markets were closely watching the tariffs that Trump would impose. Over the weekend, Trump implemented a 25% tariff on Canada and Mexico, and 10% on China. Following Trump‘s decision, Monday opened with sharp selling movements, especially in global stock markets. In the U.S., major indices like the S&P 500, Nasdaq, and Dow Jones started the week with a roughly 2% loss. The situation was not much different in Europe either; the German DAX index opened the week with a gap-down and a 2% drop. The increasing expectations of higher tariffs from Trump were considered a signal of slowing economic activity, prompting investors to seek safe havens.

Gold, considered a safe haven, started the week above the $2800 resistance level. The uncertainty about how far Trump‘s tariffs would go especially increased the demand for gold in the U.S. In Comex futures contracts, the price difference between spot gold and future contracts reached $2000 for 1 kilogram of gold. This cycle was primarily due to President Trump‘s fear of including precious metals in the tariff scheme. Additionally, gold shipments  have started in the U.S., with gold from the UK and JP Morgan being sent back to the U.S. due to tariff concerns.

We have entered a period where the demand for safe havens has increased due to Trump‘s unpredictability. Gold began the year at $2625 and gained 6% by early February. On the silver side, performance was more positive than gold. Silver prices, which started 2025 at $28.90, quickly rose to $31.70 with a 10% premium by early February. On the macroeconomic side, markets are pricing in two interest rate cuts from the Fed, while the Dollar Index remains strong due to Trump.

Domestic inflation figures have also been released. The inflation expectation was 41.25%, but the actual figure came out at 42.12%. This marks a slight decrease compared to the previous month. The decline in inflation has caused some positive movement in the exchange rate, bringing the Dollar/TL close to the 36.00 mark in the Grand Bazaar. Additionally, the rise in both the Dollar against the TL and in global gold and silver prices continues to positively affect the local prices of gold and silver.

As long as gold stays above the $2700 region, we expect it to test the $3100 level. For silver, the long-awaited upward movement may happen this year, especially if the $33.00 region is broken upwards.

This week, attention will be on both Trump’s decisions and critical data from the U.S. The most important data, which directly concerns the labor market, are the Non-Farm Payroll and Unemployment figures. These will help understand the Fed’s future interest rate policy. Weakness in the labor market may increase the likelihood of a rate cut by the Fed. In such a case, we might see signs of weakness in the Dollar Index, and once again observe record price movements in precious metals.

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