Gold hit a record high of $3,500 an ounce on Tuesday, propelled by President Donald Trump's mounting tariffs and overt pressure on the Federal Reserve. Investors, spooked by trade tensions and rate-cut debates, poured into the ultimate safe-haven asset.
Across the Atlantic, Europe’s main stock indices diverged as markets reopened after the Easter break. In Asia, key benchmarks closed mixed, while the dollar showed uneven moves against major currencies and oil prices firmed up.
Safe-Haven Assets Shine
"Lack of certainty is sending investors right into the arms of traditional safe-haven assets, with gold and the Japanese yen both cashing in on the drama," says Matt Britzman, senior equity analyst at Hargreaves Lansdown.
Trump’s Fed Remarks Fan the Flames
Over the weekend, Trump escalated his verbal assault on Fed Chair Jerome Powell, labeling him a "major loser" and "Mr Too Late." He urged preemptive rate cuts and even hinted at replacing Powell, stoking fears of a shake-up at the central bank.
U.S. stocks tumbled on Monday, with the S&P 500, Nasdaq and Dow closing roughly 2.5% lower as investors weighed the prospect of political interference at the Fed.
Eyes on the IMF
Analysts now await this week’s IMF growth forecasts, looking for clues on how the trade war could impact global output and inflation. Markets may see further volatility if Fed leadership comes under additional fire.
"Were Powell to be fired, the initial reaction would be a huge injection of volatility into financial markets and the most dramatic rush to the exit from U.S. assets that it is possible to imagine," warns Michael Brown, strategist at Pepperstone.
Reference(s):
cgtn.com
