The turbulence in the financial markets continued as trading opened on Monday (April 7, 2025), with gold prices plummeting below $3,000 per troy ounce, while the Nasdaq index sank to its lowest level in 15 months.
The escalating trade war, ignited when the President of the United States implemented reciprocal policies early Thursday, triggered this volatility. China was the first to retaliate against Trump’s policies, with the Chinese Finance Minister announcing on Friday that import tariffs on all American products would increase by 34% starting April 10.
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Under the reciprocal measures, Trump had already set a total import tariff of 54% on Chinese goods, which is set to take effect on April 9. These reciprocal measures are targeting numerous countries, hinting at the potential for an even broader trade conflict.
Such developments pose risks to the global economic growth, negatively affecting stock indices. As of 7:00 AM WIB, the Nasdaq had already fallen more than 1,000 index points to 16,460, marking its lowest point since January 8, 2024.
Interestingly, gold, typically considered a safe haven asset, also dropped nearly $68 to $2,970 per troy ounce, the lowest since March 13.
This decline in gold prices may be attributed to profit-taking, as many market participants are liquidating positions due to the significant drops in other assets like the Nasdaq. Profit-taking is employed to mitigate losses from transactions in other instruments.
Meanwhile, EUR/USD and GBP/USD experienced sharp declines but quickly managed to rebound. USD/JPY resumed its downward trend, indicating that the pressure on the US dollar remains substantial. Furthermore, the risk of a global economic slowdown could lead to a drop in oil demand, causing prices to fall below $60 per barrel, the lowest level in the past year.
