All posts by PARKERYL

Updated on March 17th, 2025 by Bob Ciura

The appeal of growth stocks is that they have the potential for huge returns. Consider the massive rally by Tesla, Inc. (TSLA); in the past five years, the stock has generated total returns over 500%.

That’s a lifetime of returns for some investors; Tesla has done this in a relatively short period of time.

The downside of growth stocks is that volatility can work both ways. Also, growth stocks can generate strong returns but also carry the burden of high expectations due to their sky-high valuations.

Right now, Tesla does not pay a dividend to shareholders. As a result, we believe income investors looking for lower volatility should consider high-quality dividend growth stocks.

The Dividend Aristocrats are a group of 69 stocks in the S&P 500 Index with 25+ consecutive years of dividend growth.

You can download an Excel spreadsheet of all 69 Dividend Aristocrats (with metrics that matter, such as dividend yield and P/E ratios) by clicking the link below:

 

Over time, any company – even Tesla – could make the decision to start paying dividends to shareholders if it becomes sufficiently profitable.

In the past decade, other technology companies, such as Apple, Inc. (AAPL) and Cisco Systems (CSCO), have initiated quarterly dividends.

These were once rapidly growing stocks that matured, and Tesla could follow the same way one day.

However, the ability of a company to pay a dividend depends on its business model, growth prospects, and financial position.

Even with Tesla’s huge run-up in share price, whether a company can pay a dividend depends on the underlying fundamentals.

While many growth stocks have made the transition to dividend stocks in recent years, it is doubtful that Tesla will join the ranks of dividend-paying stocks any time soon.

Business Overview

Tesla was founded in 2003 by Martin Eberhard and Marc Tarpenning. The company started out as a fledgling electric car maker, but has grown at an extremely high rate in the past several years.

Tesla’s current market capitalization is above $800 billion, making it a mega-cap stock.

Amazingly, Tesla’s current market capitalization is more than nine times the combined market caps of auto industry peers Ford Motor (F) and General Motors (GM).

Tesla has a growing lineup of different models and price points and is looking into expanding that lineup further to become a full-line automaker.

Since going public in 2010 at a split-adjusted price of $1.13 per share, Tesla has produced almost unbelievable returns for shareholders in hopes of massive future growth, as well as tremendous growth that has already been achieved.

Since then, it has grown into the leader in electric vehicles and business operations in renewable energy. Tesla produced about $97.69 billion in revenue in 2024.

In January, the company reported fourth-quarter revenue of $25.71 billion, which missed analyst estimates by $1.42 billion. Adjusted earnings-per-share of $0.73 missed estimates by $0.04 per share.

Total revenue increased 2% year-over-year for the fourth quarter, while adjusted EPS rose 3% year-over-year. Gross margin of 16.3% contracted by 138 basis points from the same quarter the previous year.

For 2024, revenue increased 1% while adjusted EPS declined 22% from 2023 levels.

Growth Prospects

Tesla’s primary growth catalyst is to expand sales of its core product line, and generate growth from new vehicles. The company’s S/X platform, which gave it the first bout of solid growth, but Tesla is now focused on ramping up its 3/Y platform.

Indeed, the 3/Y platform accounted for ~95% of all deliveries last quarter.

In addition, Tesla is continuing to develop new models, with a pickup truck, a semi-truck, and even a cheaper, more attainable model than the 3.

The company has begun delivering its semi-truck as production of that new vehicle begins to ramp up. It will be some time before that’s a meaningful source of revenue, but it’s a totally new product line that could boost revenue growth.

Tesla is also ramping up vehicle production. It now operates “Gigafactories” in Nevada, New York, Texas, Germany, and China, with more to come to support rising demand.

Tesla’s competitive advantage stems mainly from its best-in-class software and other technologies, including full self-driving mode.

Source: Investor Update

Tesla’s revenue growth has been very strong in the recent past. It grew revenue at an annual rate of 25% in the four-year period from 2020-2024.

That level of growth is difficult to find, which is why Tesla’s shares have performed so well.

Whether Tesla can continue to maintain its high growth rate is another question.

Such a strong growth rate bodes well for the company’s future potential. Some investors may view the guidance of Tesla as too aggressive, but we note that electric vehicle sales are growing at a high rate.

Electric vehicles are the clear path forward for automobiles, and Tesla is the leader in the space.

In addition, more than any other automaker, Tesla has delivered outstanding growth year after year. With an expanding product line, we believe the growth outlook for the company is bright.

Will Tesla Pay A Dividend?

Tesla has experienced rapid growth of shipment volumes and revenue in the past several years. But ultimately, a company’s ability to pay dividends to shareholders also requires sustained earnings growth.

While Tesla has been the epitome of a growth stock through its top-line growth and huge share price gains, its profitability is still small in relation to its market cap. TSLA stock is currently trading at more than 130 times its expected 2025 EPS of $2.56.

Without reaching consistent profitability, a company cannot pay dividends to its shareholders.

Tesla lost money since it became publicly traded back in 2010, up until 2020. It goes without saying that a money-losing company needs to raise capital to continue to fund operations.

To that end, Tesla has sold shares and issued debt to cover losses and fund expansion in recent years, both of which make paying a dividend even more difficult.

However, since 2020, Tesla has rapidly expanded its profitability and produced just over $7 billion in GAAP net income in 2024. The company also generates positive free cash flow, making it easier to service its debt obligations and avoid future dilutive share issuances.

Furthermore, the company does not pay any net interest expense, as its interest income exceeds its interest expense.

We see the improvement in profitability and free cash flow, as well as the improved balance sheet, as supportive of the company’s ability to eventually pay a dividend.

However, Tesla is still very much in high-growth mode, and we expect any dividend that may be paid to be many years away. In other words, it is much more profitable for Tesla to reinvest its earnings in its business than to distribute it to shareholders.

Even if Tesla decided to initiate a dividend, it would likely be very low.

For instance, if Tesla were to distribute 30% of its expected 2025 EPS in the form of dividends (a standard payout ratio for growth stocks that pay dividends), the stock would only yield ~0.2%.

Such a yield will be immaterial for the shareholders, but the dividend would deprive the company of cash that could be utilized for higher-return growth projects.

Tesla’s Stock Dividend

Tesla’s CEO, Elon Musk, said in early 2022, that he wants Tesla to “increase in the number of authorized shares of common stock … in order to enable a stock split of the Company’s common stock in the form of a stock dividend.”

Essentially, a stock dividend is where a company splits its stock, and the impact on shareholders is that the company’s value doesn’t change, but the share price is lower because there are more outstanding shares.

Indeed, Tesla implemented a 3-for-1 split on its stock, which came into force on August 25th, 2022. As a result, its outstanding share count rose from 1.155 billion to 3.465 billion post-stock dividends, and the stock price adjusted from about $900 before the split to about $300.

A stock dividend is not necessarily a material event for shareholders because their relative stake in the company remains the same; they have more shares at a lower price.

However, investors tend to view stock dividends and splits as bullish events; thus, stock dividends can trigger rallies in the share price.

Final Thoughts

Tesla is one of the premier growth stocks in the stock market. Shareholders who had the foresight to buy Tesla in its early years have been rewarded with enormous returns through a soaring share price.

However, investors looking for dividends and safety over the long run should probably continue to take a pass on Tesla stock. The company seems committed to using all the cash flow at its disposal to improve its operations’ profitability and invest in growth initiatives.

While there is always a possibility that Tesla’s massive share price rally could regain steam, it is also possible that the stock could fall. Investors should remember that volatility can work both ways.

More defensive investors, such as retirees, who are primarily concerned with protecting principal and dividend income, should instead focus on high-quality dividend growth stocks, such as the Dividend Aristocrats.

It is unlikely that Tesla will ever pay a dividend, or at least not for many years.

If you are interested in finding more high-quality dividend growth stocks suitable for long-term investment, the following Sure Dividend databases will be useful:

The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly:

The designs for the 2026-, 2027-, and 2028-dated American Platinum Eagles in proof finish appear to be finalized. These three coins will be part of the United States Mint’s upcoming “Charters of Freedom” series, inspired by the Declaration of Independence, the U.S. Constitution, and the Bill of Rights.

Proof American Platinum Eagles debuted in 1997 and have undergone multiple theme and design changes. Each coin is struck from 1 ounce of 99.95% fine platinum at the U.S. Mint’s West Point facility and carries a $100 face value – the highest denomination for any U.S. legal tender coin.

Since 2018, proof American Platinum Eagles have featured a common reverse design of an eagle in flight carrying an olive branch, while the obverse has showcased unique, annually changing designs. The Charters of Freedom series will continue this tradition with new obverse designs representing foundational American documents.

Last October, the U.S. Mint presented candidate designs for the series to the Citizens Coinage Advisory Committee (CCAC) and the Commission of Fine Arts (CFA). Out of three design sets proposed, both committees recommended Set 01.

A design was selected for the 2026-dated platinum coin, while slight modifications were suggested for the 2027 and 2028 designs to enhance the set’s cohesiveness. These refinements included standardizing the sun’s rays across all years to match the 2026 design, adjusting the tree in the 2027 design to appear younger and still developing, and modifying the child in the 2028 design to differentiate it from previous Mint coins featuring children. The CFA also identified misaligned date placements on the 2027 and 2028 designs, requiring correction. Additionally, a CCAC member suggested adding a 14th star to the 2028 Bill of Rights design to accurately reflect the number of states at its ratification, a recommendation the CFA also supported.

In February, both panels reviewed the U.S. Mint’s revisions and formally approved the updated designs, as detailed above and below.

Along with additional images, the following are the U.S. Mint’s official design descriptions for the selected designs.

SET 01 employs the symbolism of Nature to chronicle America’s journey through its founding documents. Through a carefully crafted progression of environmental motifs, it traces the transformational impact of each charter, together illustrating a living embodiment of our American democracy. (Image shown above.)

PTP-01-D-01A depicts sun rays beginning to emerge through storm clouds, representing the dawn of a new nation arising from the turmoil of revolution, as well as the Enlightenment ideas that influenced the Declaration of Independence. A quill symbolizing the Declaration sweeps over the landscape, marking the nation’s founding and the power of revolutionary ideas to 2 catalyze change. This design features 13 stars representing the original 13 colonies in the border. The additional inscription is “DECLARATION OF INDEPENDENCE.”

PTP-01-C-01 shows the storm clouds receding and the sunlight growing stronger, marking the nation’s transition to self-governance. In place of the quill, a young tree has taken root, representing the U.S. Constitution as a living framework in this American landscape. Its form echoes the shape of the quill, a visual reminder that this new system of government is informed by and built upon the values and ideals set forth in the Declaration of Independence. Thirteen stars representing the 13 colonies frame the scene. The additional inscription is “UNITED STATES CONSTITUTION.”

PTP-01-B-01 reveals a maturing tree, its canopy offering shelter and protection – a powerful metaphor for the rights and freedoms guaranteed to citizens in the Bill of Rights. Beneath it, a child gazes forward, representing the people whose rights are safeguarded now and the protection provided to future generations. The scene is now fully illuminated by sunlight, suggesting the powerful influence of these founding documents on our nation. Fourteen stars reflecting the number of states at ratification encircle the design. The additional inscription is “BILL OF RIGHTS.”

Novo Nordisk (NVO) shares rose Monday as the company said it would present new data on the ability of semaglutide, the active ingredient in its weight-loss drugs Ozempic and Wegovy, to lower heart risks.

The Danish drug developer is slated to take part in the American College of Cardiology Scientific Session and Expo, which runs March 29 to 31. Its presentations “will provide new information about semaglutide medicines to reduce cardiovascular risk,” focusing on conditions including type 2 diabetes, obesity, peripheral arterial disease, and chronic kidney disease. 

Shares of Novo Nordisk were up more than 3% in intraday trading Monday, recovering some of the stock’s losses last week following disappointing results from a phase 3 trial of its in-development weight loss drug CagriSema. Novo reported the average weight loss among patients taking the drug was 15.7% of their body weight after 68 weeks, whereas the drugmaker had reportedly been aiming for 25%. 

Despite Monday’s gains, shares of Novo Nordisk are down about 7% for the year so far, and have lost 40% of their value in the past 12 months.

During these busy times, it pays to stay on top of the latest profit opportunities. And today’s blog post should be a great place to start. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Stock Grader recommendations for 133 big blue chips. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.

---

Article printed from InvestorPlace Media, https://investorplace.com/market360/2025/03/20250317-blue-chip-upgrades-downgrades/.

©2025 InvestorPlace Media, LLC

Written by the Market Insights Team

Contrasting trade war tactics

Kevin Ford – FX & Macro Strategist

Last week, the Mexican peso traded below the 20 level for the first time since November. Mexican President Claudia Sheinbaum chose to continue negotiations with the Trump administration rather than retaliate with tariff hikes against the U.S., delaying any response to U.S. tariffs on steel and aluminum imports. Commerce Secretary Howard Lutnick commended the Mexican President for avoiding tit-for-tat tariff escalations, contrasting this approach with that of the Canadian government. The Mexican peso has gained 4.8% against the USD year-to-date, approaching the 200-day SMA as net short positions unwind.

In contrast, the Loonie has remained flat against the USD year-to-date. Following a tariff-driven 25 bps rate cut by the Bank of Canada, the central bank expressed concerns about an impending crisis, not only due to steel and aluminum tariffs but also because of Canadian countermeasures. Also, as noticed by B.C. Premier David Eby, Canada may not afford to be caught in a trade war with both the United States and China—its two largest trading partners.

Because of this, bearish positioning against the USD/CAD remains historically short.

The USD/CAD reached a high of 1.4521 and a low of 1.434 last week, with significant intraday swings highlighting strong resistance above 1.45 and no signs of easing below 1.43. The Loonie remains above the 20-, 40-, and 60-day SMAs, while implied volatility has dropped significantly. April 2^nd will be a key date to assess the broader trajectory of U.S. trade policy and its impact on the Canadian economy. President Trump’s advisors have distinguished between tactical tariffs, used as negotiation tools, and structural tariffs, such as the reciprocal tariffs set to be unveiled in early April, aimed at reshaping U.S. trade policy long-term.

Central bank actions will take center stage this week. After 100 bps of rate cuts in late 2024, the Fed is expected to keep rates unchanged for a second consecutive meeting on Wednesday. On Thursday, the Bank of England is also expected to hold rates steady at 4.5%, while Sweden’s Riksbank is anticipated to maintain rates at 2.25%.

Stocks rebound despite stagflation signs

Boris Kovacevic – Global Macro Strategist

Markets ended the week on a volatile but positive note as investors weighed weaker consumer sentiment versus the lack of news on the tariff front against each other. Despite rebounding initially on Friday, the US dollar remains in a clear downtrend, with investors questioning the long-term effects of tariffs. The University of Michigan survey revealed a sharp drop in US consumer sentiment to a more than two-year low in March. Despite this slowdown and weaker subjective employment prospects, inflation expectations jumped to 4.9% from 4.3%, reflecting growing concerns over President Trump’s incoming tariff plans. This stagflationary mix—weakening growth but rising price expectations—adds to uncertainty in the economic outlook.

US equities ended another week in negative territory, with the S&P 500 plunging 10% in just 16 sessions before staging a Friday rebound. Credit markets echoed growth fears, as junk bond spreads widened. The US dollar is now down about 6% from its January peak and is on track for its worst post-inauguration performance since Nixon’s second term in 1973. Investors are assessing the impact of tariffs, which could support the currency through safe-haven demand but also weigh on sentiment and economic growth, limiting the potential of a recovery.

The upcoming week will feature the Fed’s rate decision, where policymakers are expected to stay on hold. With no immediate rate move anticipated, attention will shift to the Fed’s projections and Powell’s press conference for clues on future policy direction. With rising trade tensions, a weakening labor market, and shifting Fed expectations, volatility is likely to remain elevated heading into the new week. Investors will be closely watching upcoming inflation data, Fed speak, and trade policy developments to gauge the direction of the US economy and the dollar’s next move.

Establishing a higher bottom?

Boris Kovacevic – Global Macro Strategist

The euro extended its gains on Friday, rallying against major peers as a breakthrough in German fiscal policy negotiations lifted sentiment. The deal, which includes sweeping borrowing rule changes and a €500 billion infrastructure fund, is seen as a potential boost to Germany’s economy and broader Eurozone growth. The next Chancellor Friedrich Merz secured the Greens’ backing for the fiscal package, clearing a major political hurdle. The agreement is expected to pass through the outgoing parliament this week.

The common currency has now posted a second straight week of gains against the dollar, pound, and franc. The fiscal revival in Germany could continue to be a tailwind for the euro. However, it will need to be followed by improving sentiment and hard data along the way to secure its potential for another leg higher.

Industrial production actually beat expectations in January, rising by 2% on the month, and reversing a 1.5% fall from the month prior. Wholesale prices rose as well and are now displaying growth rate that is well in positive territory. Markets are still questioning the resolve of the ECB to cut interest rates aggressively this year. The German fiscal package, rising goods and food inflation and tariff risks will be weighted against rapidly falling wage expectations and services inflation.

EUR/USD has been range-bound for about two years now, fluctuating between $1.02 and $1.12 since January 2023. A stabilization around the $1.07 – $1.08 level would be a good sign that we are making higher lows, which could set the pair up for another leg higher. However, this would need to be accompanied by stronger European data or increasing recession risks in the US. For now, markets are watching out for sentiment data and the upcoming Fed meeting.

Resilient sterling awaits BoE decision

George Vessey – Lead FX & Macro Strategist

Despite the downwardly revised UK GDP outlook following a bout of weaker data and ongoing tariff uncertainty, the British pound is holding up relatively firm against its major peers. GBP/USD remains above its 5-year average rate of $1.29, whilst GBP/EUR lingers close to €1.19 – which appears fair value based on real rate differentials. Signs of a rebound in UK inflation likely outweigh the cooling in economic activity, meaning we expect the Bank of England (BoE) to keep rates unchanged this week.

As a risk-sensitive currency, we think the pound is vulnerable to a deeper correction in equity markets, but it’s also likely to be supported by a rebound in risk appetite if Russia-Ukraine ceasefire talks gain traction. No news is also good news when it comes to Trump’s tariff threats, and sterling could be primed for a test of the $1.30 handle depending on whether the euro accelerates higher towards $1.10 versus the US dollar, due to the strong positive correlation between GBP/USD and EUR/USD. All eyes are also on the BoE’s meeting this week though. We expect the BoE to hold Bank Rate at 4.5% on Thursday, stressing heightened uncertainty and data evolving broadly as it expected since February. Markets have not ramped up expectations for BoE easing as much as for the Fed, hence the elevated UK-US yield spread adds to GBP/USD’s constructive backdrop.

The cut-hold tempo by the BoE has become well established and renewed concerns about supply weakness mean it’s very unlikely there will be more than two or three votes for back-to-back rate cuts. Although Catherine Mann, the arch-hawk-turned-dove, may have caught all the headlines last month with her vote for a 50bp rate cut, UK wage growth is at 6%, and services inflation is at 5%, meaning the rest of the committee will likely want to tread cautiously when it comes to cutting.

Safe havens yen and franc on backfoot

Table: 7-day currency trends and trading ranges

Key global risk events

Calendar: March 17-21

All times are in ET

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

Chinese tech giant Baidu (BIDU) said it has launched two artificial intelligence (AI) models, including the ERNIE X1, which it claims delivers the same performance as DeepSeek R1 “at only half the price.”

Baidu said in a statement Sunday that it had released ERNIE 4.5—its native multimodal foundation model—and ERNIE X1, the “deep-thinking reasoning model with multimodal capabilities” that the company says rivals DeepSeek’s super-efficient open-source AI model. Both models, the Chinese company said, are free for individual users of its chatbot.

ERNIE X1, Baidu said, “possesses enhanced capabilities in understanding, planning, reflection, and evolution.” The deep-thinking reasoning model, Baidu said, excels in areas including dialogue, logical reasoning and complex calculations.

DeepSeek threw markets in disarray earlier this year when the Chinese startup released its own open-source AI model that performed as well as OpenAI’s ChatGPT and were built at a fraction of the cost using less advanced chips. 

Baidu’s U.S.-listed shares are up around 1% in premarket trading Monday and have lost almost 10% of their value in the 12 months through Friday.

Looking beyond its home market in Egypt, Commercial International Bank’s (CIB’s) Islam Zekry, group chief finance and operations officer, reveals the bank’s vision to be a key financial partner for African economic expansion. To do this, it is leveraging Kenya as a strategic hub, while prioritising high-growth sectors and supporting SMEs, corporates and Egyptian exporters.

Global Finance (GF): What are CIB’s growth plans for 2025 and beyond across Africa? How will you achieve these?

Islam Zekry (IZ): CIB’s strategy is centered on expanding our footprint in East Africa by leveraging our expertise in corporate, SME and retail banking. Using Kenya as a regional hub, we will extend our reach into other key African markets that have strong trade ties with Egypt.

This growth plan is built on three key pillars: firstly, enhancing accessibility and cost efficiency through mobile and online banking solutions; secondly, leveraging the African Continental Free Trade Area (AfCFTA) to facilitate seamless cross-border transactions; and thirdly, supporting green projects and financial inclusion initiatives to foster long-term economic growth.

With this approach, we aim to deliver tailored financial solutions, enhance the customer experience and drive sustainable growth in Africa’s evolving banking landscape.

GF: Which markets and sectors are the priority for growth?

IZ: By focusing on markets aligned with Egypt’s trade interests and that show economic potential, we are prioritising SME and retail banking, trade finance, digital financial services, sustainable finance, high net worth individuals (HNWIs) and institutional banking.

Within the SME and retail banking sectors, we are supporting Africa’s growing entrepreneurial ecosystem via tailored financial products. Further, by expanding our digital financial services we can enhance financial inclusion.

We also strive to integrate ESG and sustainable finance solutions into our operations to cater to the environment and society. For example, we have invested in energy, agriculture and infrastructure to drive economic resilience.

In addition, to better serve HNWIs and institutional banking customers, we have diversified corporate lending into emerging industries.

GF: What is driving CIB’s expansion strategy?

IZ: We have seen a significant increase in the demand for financial services that support intra-African trade through economic integration.

The tailored financial solutions we offer in Kenya are a good example. These enable us to help businesses bridge trade gaps between Egypt and other African countries, while also looking to diversify our offerings and mitigate market risks to capitalise on Africa’s economic potential.

In parallel with this, CIB’s expertise in trade finance has positioned us as a key facilitator of trade between Egypt and Kenya, supporting import and export activities, supply chain finance and cross-border transactions.

We have also developed a five-year financial inclusion strategy to provide vulnerable segments with easy access to financial services using digital solutions.

GF: How does the bank’s expansion path serve as a gateway to future growth in Africa?

IZ: Kenya has several strategic advantages that enable it to be a regional financial hub and critical trade corridor between Egypt and the broader East African region.

We have already capitalised on Kenya’s leadership in digital and SME banking by providing a scalable model for financial inclusion across Africa. Further, Kenya’s enhanced trade finance and corporate banking expertise supports cross-border transactions and strengthens economic ties.

In short, by refining our approach in Kenya, we are creating a blueprint for sustainable growth across Africa.

GF: How will CIB’s client offerings enable it to succeed in efforts to expand regionally?

IZ: CIB’s growth strategy is designed to cater to a diverse range of clients through tailored financial services for SMEs, corporate and retail customers, and institutional investors. This makes us well-positioned to drive meaningful financial growth and inclusion across Africa.

For SMEs, we help them scale efficiently by providing specialised financing, digital banking tools and trade facilitation services. For corporate clients, we have comprehensive trade finance and cash management solutions to streamline transactions across African markets. And for retail customers – including the unbanked population – we offer access to the bank’s digital-centric financial products.

Meanwhile, to attract global institutional investors, we are growing our corporate lending portfolio and creating sustainable finance initiatives.

GF: How will CIB position itself as a key partner for Egyptian exporters expanding into African markets?

IZ: To empower Egyptian exporters looking to expand across Africa, we provide an array of services. Our trade finance solutions range from letters of credit to structured lending to cross-border transaction support. We also run dedicated financing programmes aimed at strengthening Kenyan-Egypt trade ties through specialised funding options for exporters.

In addition, we deliver Africa business desk services to assist key industries such as textiles, consumer durables and construction. Combined with our business forums and trade delegations, we connect Egyptian companies with new opportunities across the continent.

Ultimately, our products and services align with our strategic investments, innovative banking solutions and cross-border partnerships, with the goal to shape the future of banking across Africa, one market at a time.

Gold (XAUUSD) is set to remain in the spotlight to start the week after setting a new record high Friday above the closely watched $3,000/oz level.

The precious metal received a boost last week as investors flocked to the safe-haven asset amid concerns that the Trump administration’s unpredictable tariff policies could slow economic growth and accelerate inflation.

Gold gained 2.6% last week and has jumped 14% since the start of the year as of Friday’s close. By comparison, the S&P 500 stock index has fallen about 8% from its record high set less than four weeks ago amid the political and economic uncertainty.

Below, we take a closer look at gold’s chart and apply technical analysis to point out crucial price levels that investors may be watching.

Pennant Pattern Breakout

Gold consolidated within a two-week pennant before breaking out above the pattern’s top trendline last Thursday, signaling a continuation of the commodity’s longer-term uptrend.

Moreover, the relative strength index (RSI) confirms bullish price momentum with a reading above 50, though a push this week into overbought territory could increase the likelihood of near-term profit-taking.

Let’s turn to gold’s chart to forecast how a continuation move may play out and also identify several crucial support levels worth monitoring during potential pullbacks.

Bars Pattern Analysis

To forecast how a continuation move higher in the commodity might look, investors can use bars pattern analysis, a technique that analyzes prior trends to make future price projections.

When applying the analysis to gold’s chart, we take the price bars comprising the asset’s uptrend from August to October last year and overlay them from last Thursday’s breakout point. This forecasts an upside target of around $3,365 an ounce, around 13% above Friday’s closing price. 

The prior trending move, which commenced following a breakout from an earlier pennant pattern on the chart, played out over 57 trading days, indicating a similar move higher could last until early June this year if price action rhymes.

Crucial Support Levels to Monitor

Profit-taking in the commodity could see gold’s price initially revisit the $2,833 level. This area on the chart may provide support near the pennant pattern’s lower trendline and the upward sloping 50-day moving average.

The next lower level to monitor sits around $2,790. A pullback to this location could be met with buying interest from investors seeking entry points near the yellow metal’s prominent late-October swing high.

Finally, a deeper retracement could lead to a retest of lower support at the $2,721 level. This region, positioned about 9% below the commodity’s Friday close, may attract bids near two closely aligned peaks that formed on the chart in November and December last year.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

Written by the Market Insights Team

Stocks rebound despite stagflation signs

Boris Kovacevic – Global Macro Strategist

Markets ended the week on a volatile but positive note as investors weighed weaker consumer sentiment versus the lack of news on the tariff front against each other. Despite rebounding initially on Friday, the US dollar remains in a clear downtrend, with investors questioning the long-term effects of tariffs. The University of Michigan survey revealed a sharp drop in US consumer sentiment to a more than two-year low in March. Despite this slowdown and weaker subjective employment prospects, inflation expectations jumped to 4.9% from 4.3%, reflecting growing concerns over President Trump’s incoming tariff plans. This stagflationary mix—weakening growth but rising price expectations—adds to uncertainty in the economic outlook.

US equities ended another week in negative territory, with the S&P 500 plunging 10% in just 16 sessions before staging a Friday rebound. Credit markets echoed growth fears, as junk bond spreads widened. The US dollar is now down about 6% from its January peak and is on track for its worst post-inauguration performance since Nixon’s second term in 1973. Investors are assessing the impact of tariffs, which could support the currency through safe-haven demand but also weigh on sentiment and economic growth, limiting the potential of a recovery.

The upcoming week will feature the Fed’s rate decision, where policymakers are expected to stay on hold. With no immediate rate move anticipated, attention will shift to the Fed’s projections and Powell’s press conference for clues on future policy direction. With rising trade tensions, a weakening labor market, and shifting Fed expectations, volatility is likely to remain elevated heading into the new week. Investors will be closely watching upcoming inflation data, Fed speak, and trade policy developments to gauge the direction of the US economy and the dollar’s next move.

Establishing a higher bottom?

Boris Kovacevic – Global Macro Strategist

The euro extended its gains on Friday, rallying against major peers as a breakthrough in German fiscal policy negotiations lifted sentiment. The deal, which includes sweeping borrowing rule changes and a €500 billion infrastructure fund, is seen as a potential boost to Germany’s economy and broader Eurozone growth. The next Chancellor Friedrich Merz secured the Greens’ backing for the fiscal package, clearing a major political hurdle. The agreement is expected to pass through the outgoing parliament this week.

The common currency has now posted a second straight week of gains against the dollar, pound, and franc. The fiscal revival in Germany could continue to be a tailwind for the euro. However, it will need to be followed by improving sentiment and hard data along the way to secure its potential for another leg higher.

Industrial production actually beat expectations in January, rising by 2% on the month, and reversing a 1.5% fall from the month prior. Wholesale prices rose as well and are now displaying growth rate that is well in positive territory. Markets are still questioning the resolve of the ECB to cut interest rates aggressively this year. The German fiscal package, rising goods and food inflation and tariff risks will be weighted against rapidly falling wage expectations and services inflation.

EUR/USD has been range-bound for about two years now, fluctuating between $1.02 and $1.12 since January 2023. A stabilization around the $1.07 – $1.08 level would be a good sign that we are making higher lows, which could set the pair up for another leg higher. However, this would need to be accompanied by stronger European data or increasing recession risks in the US. For now, markets are watching out for sentiment data and the upcoming Fed meeting.

Resilient sterling awaits BoE decision

George Vessey – Lead FX & Macro Strategist

Despite the downwardly revised UK GDP outlook following a bout of weaker data and ongoing tariff uncertainty, the British pound is holding up relatively firm against its major peers. GBP/USD remains above its 5-year average rate of $1.29, whilst GBP/EUR lingers close to €1.19 – which appears fair value based on real rate differentials. Signs of a rebound in UK inflation likely outweigh the cooling in economic activity, meaning we expect the Bank of England (BoE) to keep rates unchanged this week.

As a risk-sensitive currency, we think the pound is vulnerable to a deeper correction in equity markets, but it’s also likely to be supported by a rebound in risk appetite if Russia-Ukraine ceasefire talks gain traction. No news is also good news when it comes to Trump’s tariff threats, and sterling could be primed for a test of the $1.30 handle depending on whether the euro accelerates higher towards $1.10 versus the US dollar, due to the strong positive correlation between GBP/USD and EUR/USD. All eyes are also on the BoE’s meeting this week though. We expect the BoE to hold Bank Rate at 4.5% on Thursday, stressing heightened uncertainty and data evolving broadly as it expected since February. Markets have not ramped up expectations for BoE easing as much as for the Fed, hence the elevated UK-US yield spread adds to GBP/USD’s constructive backdrop.

The cut-hold tempo by the BoE has become well established and renewed concerns about supply weakness mean it’s very unlikely there will be more than two or three votes for back-to-back rate cuts. Although Catherine Mann, the arch-hawk-turned-dove, may have caught all the headlines last month with her vote for a 50bp rate cut, UK wage growth is at 6%, and services inflation is at 5%, meaning the rest of the committee will likely want to tread cautiously when it comes to cutting.

Safe havens yen and franc on backfoot

Table: 7-day currency trends and trading ranges

Key global risk events

Calendar: March 17-21

All times are in GMT

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.