Pound (GBPUSD=X, GBPEUR=X)

The pound held steady against the dollar in early European trading, sitting at $1.2907, as investors remained cautious ahead of the upcoming spring statement. Chancellor Rachel Reeves is set to unveil her fiscal plans on Wednesday, with attention fixed on how she will address the country’s economic challenges.

Reeves has already committed to no further tax hikes, after facing a backlash from the corporate sector over her decision to raise employers’ contributions to National Insurance (NI) from 13.8% to 15%. This suggests Reeves may have little choice but to implement significant cuts to public spending to manage the fiscal deficit.

Such cuts would probably lower consumer inflation expectations, fuelling speculation that the Bank of England (BoE) could move to reduce interest rates in the near term.

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Meanwhile, the greenback strengthened, with the Dollar Index (DX-Y.NYB) rising to 104.42, its highest in more than two weeks. The dollar held on to Monday’s gains, supported by strong preliminary March data from the US S&P Global Purchasing Managers Index (PMI) and growing optimism that president Donald Trump’s tariff announcements on April 2 will be narrower in scope than initially feared.

The pound edged slightly higher against the euro, gaining 0.1% to 1.1973, as the single currency remained near a three-week low set on Monday.

Gold (GC=F)

Gold prices remained firmly above the $3,000 mark, though gains were tempered by a stronger dollar.

Spot gold was steady at $3,020.84 per ounce, while gold futures climbed 0.1% to $3,018.20. Since the start of 2025, gold has surged 15.2%, setting 16 record highs, four of which breached the $3,000 mark.

"We've hit record after record, and now the market is just consolidating these gains and this is enforced by a somewhat higher US dollar," TD Securities head of commodity strategies Bart Melek said.

Rising geopolitical tensions, particularly Israel’s ongoing military operations in Gaza, have pushed investors towards gold as a safe haven. The looming prospect of US tariffs under the Trump administration has added to global economic uncertainty.

Persistent inflation concerns, coupled with fears of slower economic growth, have further driven investors to use gold as a hedge. Additionally, expectations that the US Federal Reserve may soon cut interest rates have bolstered its appeal.

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"Investors looking to diversify their portfolios and hedge against market uncertainty and inflation may finally turn their attention to gold mining equities," VanEck precious metals portfolio manager Imaru Casanova said.