Financial markets continue to experience turbulence as of Monday (April 7, 2025), reacting to the escalating trade war. It has been reported that the President of the United States announced reciprocal policies since early Thursday. The following day, in response to Trump’s measures, the Chinese Finance Minister stated they would increase tariffs on all imports from the United States by 34%. This has led to significant market fluctuations persisting into today.
GOLD
The price of Gold (XAUUSD) is displaying erratic movements in today’s trading session. Earlier, Gold plummeted to US$2,970 per troy ounce before rebounding above US$3,000. Following an all-time high of US$3,167.65 per troy ounce last Thursday, Gold has been extremely volatile.
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The drop in Gold prices may have been driven by profit taking, as many market participants liquidated their positions due to the decline of other assets like Nasdaq. Profit taking occurs as investors aim to mitigate losses typically encountered in other transactions.
This phenomenon is evident in Gold’s sudden sharp rise again this morning. The extensive trade war poses risks to global economic growth, generating a positive sentiment for Gold.
OIL
Oil prices took a severe hit last week, extending into this morning as it dropped below US$60 per barrel, marking the lowest level in a year. Concerns about declining oil demand due to potential global economic slowdown continue to exert pressure.
This sentiment is expected to influence Oil’s movement during European session trading.
EURUSD
The EURUSD pair dropped to 1.08780 this morning before reversing upwards, climbing back above 1.10000. The fluctuation in EURUSD indicates that the US dollar is facing pressure due to risks of economic slowdowns in America.
Moreover, Trump’s reciprocal policy may provoke retaliatory measures from more countries, which could negatively impact the dollar.
GBPUSD
The movement of the GBPUSD pair mirrored that of the EURUSD, dipping to 1.29356 before recovering to 1.29329.
With the UK facing an import tariff of only 10% under Trump’s policies, there remains a positive sentiment for the pound sterling. Conversely, with the US dollar under pressure, GBPUSD may gain favorable sentiment.
USDJPY
USDJPY continues to trade erratically within the range of 144.818 – 146.842 as of this afternoon, remaining near a six-month low. The yen is seen as a safe haven asset benefiting from the global economic slowdown risks stemming from the trade conflict.
Additionally, the US dollar is experiencing pressure due to the risks facing the US economy. This situation may lead USDJPY to face further declines.
Nasdaq
Nasdaq experienced a downturn on Thursday and Friday of last week, with this trend continuing today. Nasdaq has hit a low of 16,460, the lowest level since January 2024. Compared to Friday’s closing, Nasdaq has dropped over 1,000 index points, totaling more than 3,500 index points in just three days.
The sentiment surrounding Nasdaq remains negative due to the trade war’s potential to widen, putting the global economy at risk of deceleration.
