Today, escalating trade tensions between the U.S. and China, a rebound in gold prices, and a strong recovery in Asian stock markets are dominating headlines. Let’s explore the key events driving financial markets.
Trump’s Tariff Threat Fuels Trade War Fears
President Trump’s latest tariff threat against China has sent shockwaves through global markets, reigniting fears of a full-blown trade war.
On Monday, Trump threatened an additional 50% tariff on Chinese goods if Beijing doesn’t reverse its recent 34% tariff hike on American imports by April 8. This follows the April 2 “Liberation Day” tariff plan, which already set a 10% baseline tariff on all U.S. imports (effective April 5) and higher reciprocal tariffs on countries like China (54% total), the EU (20%), Vietnam (46%), and Taiwan (32%), starting April 9. China’s Ministry of Commerce responded with a vow to “fight to the end,” signaling potential countermeasures.
UBS warns that if tariffs persist, China’s 2025 export growth could drop by 5 percentage points, with GDP growth slowing by 1.5 points, impacting Chinese firms’ revenues and profits significantly.
Gold Rebounds as Safe-Haven Demand Surges
Amid this uncertainty, gold prices have bounced back, climbing 0.7% to $3,002.68 per ounce in Asian trading today after hitting a three-week low below $3,000 on Monday.
The yellow metal’s safe-haven appeal has been reignited by the tariff escalation, with June gold futures also up 1% to $3,024.0 an ounce. ING analysts note that gold’s recent selloff was driven by investors covering losses elsewhere, but they expect the metal’s safe-haven status to drive further gains as trade tensions persist.
A weaker U.S. dollar (down 0.4%) and expectations of Federal Reserve rate cuts in 2025 are also supporting gold, alongside gains in silver (up 1.3% to $29.970 an ounce) and platinum (up 0.5% to $919.0 an ounce).
Asian Stocks Stage a Strong Recovery
Meanwhile, Asian stock markets staged a robust recovery today after Monday’s tariff-induced slump.
Japan’s Nikkei 225 led the charge, soaring nearly 7%, with the TOPIX index also up over 7%, fueled by a weaker yen and a tech stock surge. Chipmakers like Tokyo Electron and Advantest Corp. jumped 10% and 12%, respectively, while SoftBank Group rose over 12%.
Hong Kong’s Hang Seng rebounded 3% after a 15% plunge on Monday, and China’s CSI 300 and Shanghai Composite gained 0.5% and 0.7%, respectively, bolstered by state-owned firms’ equity investment pledges.
Australia’s S&P/ASX 200 rose nearly 2%, though Singapore’s Straits Times Index fell over 2%, bucking the regional trend.
The recovery was aided by an overnight uptick in U.S. tech stocks, with Nasdaq futures jumping in Asian trading.
Copper Edges Up on China Stimulus Hopes
Copper prices also edged up, with London Metal Exchange benchmark futures rising 0.5% to $8,783.50 a ton, driven by hopes of a Chinese stimulus package to counter tariff impacts.
A Bloomberg report noted that Chinese policymakers are discussing measures to boost consumption, though U.S. copper futures dipped 0.3% to $4.3165 a pound, reflecting lingering tariff concerns.
A stronger stimulus could lift industrial metals, but a prolonged trade war might dampen global demand.
U.S. Equities Remain Under Pressure
On the U.S. front, equities remain under pressure, with the S&P 500 down 5% year-to-date and the Nasdaq off nearly 10%.
Despite a slight Nasdaq uptick on Monday and stronger futures today, consumer sentiment is at its lowest since 2022, driven by tariff fears, even as Q4 2024 GDP was revised up to 2.4% and jobless claims held steady at 224,000.
The tariff escalation threatens to raise costs for U.S. firms, particularly in tech and retail, potentially squeezing margins further.
Stay Informed
At CG FinTech, we’re here to keep you updated with the latest financial news. Follow our Media Center for daily market news and insights to navigate these turbulent markets.
Forward Looking Statement Disclaimer
This document contains forward-looking statements, which can generally be identified by the words “expects,” “believes,” “continues,” “may,” “estimates,” “anticipates,” “hopes,” “intends,” “plans,” “potential,” “predicts,” “should,” “will,” or similar expressions. Such statements are based on CG FinTech’s current expectations and assumptions, but actual results could differ materially from those anticipated due to a number of risks and uncertainties. CG FinTech does not guarantee the accuracy or completeness of these statements and undertakes no obligation to update or revise any forward-looking statements.
Disclaimer
The information provided herein is for informational purposes only and does not constitute an offer or solicitation to buy or sell any financial instruments. Trading Contracts for Difference (CFDs) and foreign exchange (forex) carries a high level of risk and may not be suitable for all investors. It is important to fully understand the risks involved and seek independent financial advice if necessary.
Leave a Reply