The escalating trade conflict between the United States and China is taking center stage in the markets on Monday (October 13, 2025). Financial markets have been highly volatile since last Friday after President Donald Trump expressed his anger and announced a staggering 100% tariff increase on imports from China, effective November 1.
Additionally, Trump has implemented export controls on software and has canceled upcoming meetings with Chinese President Xi Jinping.
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The tariff hike came after China introduced its own export restrictions on rare earth metals, which are crucial for various industries including electronics, electric vehicles, and defense. Currently, China supplies around 90% of the world’s rare earth metals, making it increasingly difficult for nations like the United States to access these vital resources.
China has already stated that it will retaliate if the US does not reverse the tariff increase. This sentiment will continue to impact market movements during tonight’s trading session.
GOLD
The price of Gold (XAUUSD) has surged as trading begins in the European session, reaching an all-time high of $4,079.73 per troy ounce, climbing over $620 or 620 pips.
The heightened demand for Gold as a safe haven reflects the increasing risks associated with the escalating US-China trade war. Consequently, Gold’s price has continued to soar, breaking previous records.
This sentiment will likely exert further influence on Gold prices in tonight’s trading session.
OIL
Oil prices (CLS10) have risen to $60.05 per barrel at the start of European trading. Compared to the close on Friday, Oil has climbed $1.78 following a sharp decline of $3.22 last week, which brought prices to their lowest in five months.
Oil’s rebound comes after US Vice President JD Vance initiated negotiations with China. However, China has firmly stated that the US must rescind the tariff increases and engage in dialogue. They have also indicated they will respond to the US actions.
This sentiment will likely impact Oil prices throughout the day.
EURUSD
The EURUSD currency pair has demonstrated volatility, fluctuating between 1.16299 and 1.15815 as European trading commences. The dynamics surrounding US-China import tariffs have led to significant price variation in this pair.
If tensions escalate further, particularly if China retaliates against the tariff increases, the US dollar could face downward pressure, creating a favorable environment for the EURUSD.
GBPUSD
Similar to the EURUSD, this currency pair has exhibited volatility, trading between 1.33148 and 1.33662 at the outset of European trading. The tensions from the ongoing US-China trade conflict are affecting movements in this pair as well.
This suggests that if the situation deteriorates, the GBPUSD may experience positive sentiment.
USDJPY
The USDJPY has seen an increase of nearly 1.300 points (130 pips) to 152.445 as European trading begins, rebounding after a drop of more than 185 pips last Friday. The uptick follows US Vice President Vance’s proposal to negotiate with China.
However, given that China remains steadfast, there is a possibility that the USDJPY may face negative sentiment if the Chinese government chooses to respond to Trump’s tariff hike.
NASDAQ
With JD Vance opening the door to negotiations with China, the Nasdaq has surged by 767 index points to 24,943 at the start of European trading, recovering after a plunge of over 1,100 points last Friday.
Last week, the Nasdaq frequently reached all-time highs before its recent sharp decline, effectively erasing almost a month of gains in just one day.
The current rise in the Nasdaq remains vulnerable, as a potential tariff response from China could place downward pressure on the index once again.
