The turbulence in the financial markets continues to respond to the dynamic of import tariffs, this time shifting towards a more favorable direction. U.S. President Donald Trump has decided to delay the reciprocal policy for 90 days, leading to a reduction in high import tariffs for countries now down to 10%. This deferment applies to nations that have not retaliated against the U.S. by raising their own import tariffs.
Following this announcement, the Nasdaq soared by 2,124 index points, marking an increase of over 12%, reaching 19,350 during trading on Wednesday. This daily gain represented the largest rise since January 2001. Additionally, Gold prices jumped by more than $100, or 1,000 pips, hitting $3,082.57 per troy ounce.
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This movement underscores the positive correlation between the two in the short term. When the Nasdaq fell, Gold prices also declined. The reason is that many market participants liquidate their Gold buy positions due to the plunging of other assets like the Nasdaq to cover losses or to bolster funds in case of a margin call.
Now that stock indices are climbing again, Gold has the potential to continue its upward trend. In trading on Thursday (April 10, 2025), Gold rose back to $3,100 per troy ounce, while the Nasdaq corrected to 19,169.
Although Trump has postponed the reciprocal policy concerning countries viewed as “respecting” U.S. policies, the tariff on China has increased to 125% from the previous 104%. This increase followed China’s implementation of a tariff hike on American products to 84% yesterday.
Trump’s actions could signify that the trade war is now primarily focused on China, reminiscent of the situation during 2018-2019. The trade conflict had resulted in a slowdown in global economic growth, leading to a sharp rise in demand for Gold as a safe haven asset.
