Gold Retakes $3000, Silver $30 as Trump's Tariffs 'Medicine' Crushes Stocks
Monday, 4/07/2025 13:54
GOLD BULLION recovered from a 2.0% plunge early Monday, reversing the first drop through $3000 per Troy ounce since reaching that record price 3 weeks ago in London as global stock markets continued to tumble after US President Donald Trump and his economic team refused to reconsider the massive trade tariffs they announced last week,
writes Atsuko Whitehouse at BullionVault.
Japan's Nikkei 225 sank 7.8% to an 18-month low, while Hong Kong's Hang Seng index plummeted by 13.2% and mainland China's CSI 300 plunged 7.1%, making its largest one-day drop since last October.
European bourses then tumbled more than 5% Monday morning to a 17-month low on the region's Stoxx 600 index, and US stock-index futures were sharply lower in early trading as equity markets again took fright at
Trump's "Liberation Day" trade tariffs.
"Someday people will realize that Tariffs, for the United States of America, are a very beautiful thing!"
said Trump on Sunday, calling the policy "medicine" for the US economy, aimed at reducing cheap imports and boosting domestic manufacturing jobs.
"I see no reason that we have to price in a recession," said Trump's Treasury Secretary Scott Bessent separately.
But the odds of the Federal Reserve cutting interest rates in May – seen as just a 1-in-10 chance before Trump's "Liberation Day" last Wednesday – have now jumped to 1-in-2, according to betting on interest-rate futures.
Futures on New York's S&P500 stock index meantime fell as much as 4.4% having already tumbled 9.1% last week, the worst such drop since the onset of the Covid pandemic in 2020, with more than $5 trillion of market cap erased on Thursday and Friday alone.
Spot gold for London settlement in contrast pared an earlier 2.0% drop to 3-week lows, bouncing to $3040 per Troy ounce after dropping $27 below the $3000 level before falling back to trade $150 below last Tuesday's all-time London benchmarking high of $3167.
"The sharp drop in stock prices triggered margin calls for hedge funds last week, prompting them to sell gold and raise cash," says Bruce Ikemizu, chief director of the Japan Bullion Market Association.
"We don't expect the gold sell-off to be prolonged," says Daniel Hynes, senior commodity strategist at Australasian bank ANZ.
Prices for silver, which finds nearly 60% of its annual demand from industrial uses, today recovered an earlier drop of 4.3% to 7-month lows, rallying back above $30 per Troy ounce.
That still put the grey metal at Great Depression-era lows when priced against gold, with
the Gold/Silver Ratio trading at 100.
Industrially-vital copper meantime fell another 1.1% after plummeting 14.2% last week, while crude oil slid 3.0% further after sinking 8.9% over the previous 5 sessions.
"Below $3000, I believe central bank buying is likely to provide support for gold, " says Ikemizu at the JBMA, "just like the surge we saw from Thursday's lows."
The People's Bank of China added 3 tonnes to its gold reserves in March to 2292 tonnes, the fifth consecutive month of reported purchases, according to data published by – the State Administration of Foreign Exchange in China.
Email us
