Gold Pulls Back, Oil Drops, Markets Slide as Tariff Turmoil Grows – Century Financial
- Gold
Gold retreated from its recent peak, impacted by market pessimism stemming from President Trump’s aggressive tariff policy. After reaching a record high of $3,167 per ounce on Thursday, prices declined as the potential global economic repercussions of the tariffs became evident. Nevertheless, gold remains supported by persistent trade volatility, macroeconomic uncertainties, and geopolitical tensions. Year-to-date, gold has surged nearly 18%, building on its 2024 gains, fueled by significant central bank acquisitions, geopolitical tensions and robust Asian demand. Despite a dip below the psychological level of $3,100 today, gold is on course for its fifth consecutive weekly advance.
Trump’s tariffs include a 10% baseline duty on all imports and higher rates targeting major trading partners like China (34%), the EU (20%), and Japan (24%). These measures have amplified fears of slower economic growth and stagflation—a scenario historically favorable for gold as a store of value in the long term.
On the 4-hour chart, the yellow metal is trading below the 9-day SMA at $3,097 and could see resistance at the Bollinger higher band at $3,150 and support near the 50-day SMA at $3,048.
- Crude Oil
Oil prices dropped sharply yesterday, falling by 5.3%, and continued to slide today, dropping another 1.67% in early trading. The decline came after two major developments. One, U.S. President Donald Trump announced a wave of new tariffs, raising concerns about the global economy, and OPEC+ decided to increase oil production much faster than expected. Oil is now trading below $66. OPEC tripled its planned output hike in what insiders say is a move to lower prices and punish countries that were producing more than their agreed limits. These two events have shaken the oil market. Since Trump took office, oil prices have been pulled in different directions. On one hand, U.S. sanctions on countries like Russia, Iran, and Venezuela could reduce supply. But on the other hand, the growing trade war could weaken global demand. Adding to the pressure, China’s oil demand has been weaker than expected. From a technical point of view, oil is trading below its 9-day simple moving average. The next support level is $63.69, the low from May 2023, while resistance is seen at $67.75.
- US Markets
Wall Street benchmarks slumped in Thursday’s session, suffering its steepest one-day losses since 2020 after US President Donald Trump’s sweeping tariffs ignited fears of an all-out trade war and a global economic recession. The S&P 500 tumbled 4.84%, and the Nasdaq plummeted 5.97% after Trump unveiled a 10% baseline tariff on all imported goods, with even higher levies for key trading partners. The S&P 500 fell back into a correction Thursday, down more than 10% from its February all-time high. The Russell 2000 dove more than 6%, the first widely followed measure of US stocks to enter a bear market. Trump’s ongoing tariff announcements caused uncertainty in the market, and this uncertainty has started to show up in some sluggish economic data, which further pressured stocks by heightening recession fears. The one sector not in the red was consumer staples, which gained 0.69%. Investors now turn to Friday’s payrolls data and Fed Chair Jerome Powell’s speech the same day, which could offer crucial insights into the US economy’s health and the future path of interest rates. On the daily chart, the SPX index is trading below the 9-SMA, with potential support and resistance around 5,333 and 5,500 levels.
- US Dollar Index
The dollar index fell 1.69% in yesterday’s session, a multi-month low, as investors assessed the effects of Trump’s new reciprocal tariffs. Investors are now concerned about a global trade war, with yields falling across the curve and safe haven demand for Yen increasing, further pressuring the dollar.
Trump announced that he would impose a 10% baseline global tariff on all imports to the United States and higher duties on some of its biggest trading partners, including a rate of 20% on the European Union and a rate of 24% on Japanese goods. China now faces combined duties of some 54%, when also factoring in the 20% tariffs he imposed earlier this year.
Investors are now looking forward to the release of the Nonfarm Payrolls data today, followed by the Unemployment Rate and speeches by Chair Powell, Waller, and Barr, which will dictate the movement of the dollar.
From a technical perspective, the index is trading below 9 SMA on the daily chart. The dollar index has support at the 101.2 level with resistance at 102.2 on the 4-hour chart. A break below the support could test the psychological level of 100.
Last Updated on 5 days by PR News Desk
