The pound (GBPUSD=X) saw a 0.3% increase against the dollar, reaching $1.2513, as global markets reacted to the uncertainty surrounding President Donald Trump’s fluctuating tariff policies. The dollar initially strengthened after Trump announced new tariffs on Mexico, Canada, and China, triggering investor concern. However, it quickly retreated following a surprise announcement that the levies on Mexico and Canada would be delayed. This offered temporary relief, but the optimism was short-lived as Trump proceeded with new taxes on Chinese imports, prompting retaliatory tariffs from Beijing and reigniting fears of escalating trade tensions. Despite the weaker dollar, the pound remains under pressure due to caution surrounding the upcoming Bank of England’s (BoE) monetary policy decision. Meanwhile, the pound remained relatively stable against the euro (GBPEUR=X), trading at €1.2017.
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Gold’s Record-Breaking Surge Amidst Global Uncertainty
Gold (GC=F) prices surged to a new record high, with spot prices jumping 1.85% to $2,868.08 per ounce and gold futures rising 0.7% to $2,830.70. This impressive performance builds on a 9% gain in 2025, following a 26% rise in 2024. Analysts attribute gold’s remarkable ascent to growing geopolitical uncertainty and concerns about potential disruptions linked to President Trump’s policies and the impact of tariffs. Jim Reid, a strategist at Deutsche Bank, highlighted the market’s nervousness despite the temporary relief from tariff delays, emphasizing that tariff risk remains priced into several key assets.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, described gold as “the ultimate Trump hedge,” arguing that demand for safe haven assets remains high due to growing global uncertainties. Ozkardeskaya suggests that central banks seeking to reduce US exposure further fuel the demand for gold, contributing to its record-breaking run. With gold hitting a record high for the fourth consecutive session, reaching $2,860 per ounce in Asia, some analysts believe $3,000 per ounce is within reach.
Oil Prices and Trade War Concerns
Oil prices (BZ=F, CL=F) recovered some losses after a sharp decline of over 3% driven by concerns that a US-China trade war could negatively impact global growth. Brent crude futures fell 0.7% to $75.70 per barrel, while US West Texas Intermediate (WTI) crude lost 0.5% to $72.33 per barrel. The initial plunge was attributed to fears that escalating trade tensions would hinder economic growth and consequently reduce oil demand. However, the market found some support after Trump signed a directive to increase economic pressure on Iran. This move, aimed at strengthening the enforcement of US sanctions, could significantly curtail Iran’s oil exports, potentially by as much as two-thirds.
Projections from major financial institutions, including Goldman Sachs, JPMorgan, and Morgan Stanley, indicate that Brent is expected to average $73.01 per barrel in 2025, while WTI is forecast at $68.96, according to the Wall Street Journal. In broader market activity, the FTSE 100 (^FTSE) experienced a slight decline of 0.1%, reaching 8,563 points.
