Global Market Update
The prices of gold and silver have reached record highs due to the threat of new tariffs imposed by US President Donald Trump on eight European countries. This decision has caused uncertainty in the market, leading investors to seek safer assets.
Record Highs for Gold and Silver
The price of gold touched $4,689.39 (£3,499) an ounce, while silver rose to a peak of $94.08 an ounce. Precious metals are seen as safer assets to hold in times of uncertainty, and their prices have soared over the past year. The rise in gold and silver prices can be attributed to various factors, including expectations of interest rate cuts, central banks adding gold to their reserves, and China’s restrictions on silver exports.
Impact on Stock Markets
The threat of new tariffs has had a negative impact on European stock markets. The FTSE 100 index closed down almost 0.4%, while the FTSE 250 closed 0.9% lower. Shares in financial firms, industrial stocks, carmakers, tech, and luxury goods firms saw sharp falls. However, shares in gold miners and European defense stocks rose following the increase in precious metal prices.
European Markets Take a Hit
In Germany, the Dax index fell 1.3%, with car companies such as BMW, Mercedes-Benz, and VW down by about 2-3%. In France, the Cac 40 index was down 1.8%, with luxury brands like LVMH and Hermes among those that lost out.
US Markets Closed
Markets in the US were closed on Monday for a public holiday. However, the US Supreme Court is set to rule on whether President Trump overstepped his authority by imposing some tariffs using the International Emergency Economic Powers Act. This decision could have a significant impact on the market and may lead to another huge upset if the court were to strike down Trump’s tariffs.
Trade Tensions and Global Growth
Trade tensions are one of the main risks to global economic growth, according to the International Monetary Fund (IMF). The IMF has described the global economy as "steady" but warned that an end to the AI boom and a "flare up" in trade tensions could pose risks to growth.
Conclusion
In conclusion, the threat of new tariffs imposed by US President Donald Trump has caused uncertainty in the market, leading to record highs for gold and silver prices. The impact on stock markets has been negative, with European markets taking a hit. The US Supreme Court’s decision on Trump’s tariffs could have a significant impact on the market, and trade tensions remain a main risk to global economic growth. As investors continue to seek safer assets, it will be essential to monitor the market closely and adjust investment strategies accordingly.
