Gold Hits 5-Week EUR and GBP Lows as Trump Tariffs Spur Stock-Market Volatility
Monday, 3/10/2025 14:41
GOLD PRICES slipped on Monday against a weak US Dollar, hitting 5-week lows for Euro and UK investors as global stock market volatility rose to multi-month highs as worries deepened over US economic growth amid President Trump's volatile stance on trade tariffs,
writes Atsuko Whitehouse at BullionVault.
Having settled at $2931 per Troy ounce at Friday's 3pm London benchmark auction – reversing almost of the prior week's $100 plunge – spot gold prices today traded down to $2905.
"Gold's overdue correction once again proved short-lived," says derivatives platform Saxo Bank's commodity strategist Ole Hansen, "with buyers returning to seek shelter against broad market uncertainty and concerns over US tariffs."
Two days after imposing sweeping import tariffs on goods from Canada and Mexico – the USA's two biggest trade partners – Donald Trump last Thursday abruptly suspended many of those levies.
The US President however implied that any relief would be short-lived, saying that other tariffs on Canadian and Mexican products will be introduced in April.
The CBOE Volatility Index tracking the pace of movement in US stock-market derivatives leapt almost 10% on Monday to its highest in nearly 3 months.
That has seen the VIX climb over 60% since Trump returned to the White House on 20 January.
The VIX volatility index's last peak came in mid-December, when the Federal Reserve's last interest-rate decision of 2024 ended with
Fed members halving their rate-cut forecast for 2025.
S&P500 futures fell 1.3% on Monday, extending last week's 3.1% plunge in New York's major share index – the worst weekly performance since September.
Tech-stock Nasdaq 100 futures declined 1.6% following a 3.5% loss, while Dow Jones Industrial Average futures dropped 1.1% after a 2.4% decline.
"The trade war being waged by the Trump administration is encouraging central banks as well as individual investors to buy gold," says Bruce Ikemizu, chief director of the
Japan Bullion Market Association.
China's central bank raised its gold reserve by 5 tonnes in February, the 4th straight month of expansion, while the National Bank of Poland increased its gold reserve by 29 tonnes – Warsaw's largest monthly purchase since June 2019.
Gold investing leapt on BullionVault in February, despite the safe haven's latest surge to record highs.
Globally,
gold-backed ETF trust funds meantime saw their largest inflow since March 2022, totalling almost 100 tonnes valued at $9.4 billion.
In contrast to gold amid Monday's stock market volatility, prices for silver – primarily an industrial metal finding nearly 60% of its annual demand from productive uses – held unchanged at $32.50 per ounce.
Volatility in European equity bourses meantime hit a 7-month high as the Stoxx 600 index dropped as much as 0.8% following overnight falls in China and Hong Kong's Hang Seng index after the world's 2nd largest economy released weak data.
Inflation in China's cost of living flipped into deflation in February, giving a negative year-on-year reading for the first time in 13 months.
China's core CPI index also dropped, down 0.1% with only its 2nd negative reading in more than 15 years according to data published by the National Bureau of Statistics on Sunday.
Besides responding tit-for-tat against Trump's latest trade tariffs on Chinese goods entering the USA, Beijing's Communist Party Government widened the US-led trade war at the weekend, saying it will impose tariffs on imports of rapeseed oil, pork and seafood from Canada in retaliation for Ottawa putting duty of 100% and 25% respectively on Chinese-made electric vehicles and base metals steel and aluminium 4 months ago.
Gold prices on the Shanghai Gold Exchange today rose 0.3% to ¥681 per gram, continuing to show a premium to London prices and suggesting stronger demand in China – the precious metal's No.1 consumer market.
Canada's appointment of former central-bank boss Mark Carney as Prime Minister today saw the Canadian Dollar rally from 22-year lows versus the US Dollar, while the Mexican Peso also rose from last week's 3-year lows.
London gold priced in Euros meantime fell 0.3% to a 5-week low near €2676 while
the UK gold price in Pounds per ounce edged 0.2% lower to £2246.
Email us
