The global financial markets experienced significant volatility following President Donald Trump’s announcement of plans to impose a 25% tariff on all steel and aluminum imports, including those from key allies like Canada and Mexico. This move sparked a flight to safety, driving gold prices to record highs while the British pound held steady against a strengthening US dollar.
Table Content:
Pound Holds Steady Amidst Trade War Fears
The British pound (GBPUSD=X) remained relatively stable against the US dollar, trading just above the flatline at $1.2399. The dollar’s strength was fueled by its safe-haven status amidst the escalating trade tensions. While the UK could be impacted by these tariffs, Trump expressed optimism about reaching a trade agreement with the UK. However, market participants remain cautious and are closely monitoring any further developments in US trade policy. Home Office minister Dame Angela Eagle acknowledged the need to await further clarification from the US president regarding the tariffs. She emphasized the importance of the balanced trading relationship between the UK and the US. UBS analysts suggest that tariff risks remain a significant concern and could impact the pound’s recent recovery against the dollar. The pound also saw a slight increase against the euro (GBPEUR=X), trading at €1.2024.
Gold Prices Soar to Record Highs on Safe-Haven Demand
Gold prices (GC=F) surged to unprecedented levels as investors sought refuge from the potential fallout of a global trade war. Spot gold climbed 1.2% to reach $2,895.60 per ounce, while gold futures contracts rose 1.17% to $2,921.40. Analysts attributed gold’s rally to its safe-haven appeal in times of geopolitical uncertainty and economic instability. The escalating trade tensions, coupled with President Trump’s unpredictable policies, have significantly boosted gold’s attractiveness as a safe-haven asset. The precious metal has experienced a remarkable 10% gain in 2025, building on its impressive 26% surge in 2024. Kathleen Brooks, research director at XTB, noted the timing of Trump’s tariff announcement and speculated on its potential impact on gold prices, suggesting the possibility of a further price rally driven by increased demand.
Oil Prices Rise on Trade War Concerns and Inflationary Pressures
Oil prices (BZ=F, CL=F) also experienced an upward trend, with Brent crude futures rising 0.4% to $74.97 per barrel and US West Texas Intermediate (WTI) crude climbing by the same margin to $71.31 per barrel. The escalating trade tensions and the potential for retaliatory tariffs from China have raised concerns about global economic growth and energy demand. Experts warn that a full-blown trade war could significantly impact the global economy and exacerbate inflationary pressures. China’s retaliatory tariffs against the US took effect, adding to the market uncertainty. Oil and gas traders are seeking exemptions for US crude oil and liquefied natural gas imports from China. Meanwhile, ongoing uncertainty surrounding US Federal Reserve policies and US sanctions on Iranian oil exports further contribute to the volatility in energy markets.
Broader Market Performance
The FTSE 100 (^FTSE) showed resilience amidst the global market turbulence, advancing 0.3% to 8,729 points.
Conclusion
President Trump’s tariff announcements have sent ripples across the global financial markets. While the British pound remained relatively stable, gold prices soared to record highs, and oil prices edged higher on growing concerns about a potential trade war and inflationary pressures. The ongoing trade disputes and geopolitical uncertainties are expected to continue influencing market sentiment in the coming weeks. Investors are advised to closely monitor developments in trade policy and their potential impact on various asset classes.
