As a global market index plummeted on Friday due to concerns about an impending trade war triggered by tariff measures made by U.S. President Donald Trump, safe-haven gold reached a new record high.
Trump’s 25% duty on auto imports and his intentions for much larger levies next week were the main causes of the nail-biting, even though U.S. traders had new sticky inflation data to complain about. All three major Wall Street indices finished lower, marking their third consecutive decline. Financial stocks, consumer discretionary, technology, and communication services were the greatest losers. Stocks in utilities ended the day higher. The Nasdaq Composite dropped 2.7% to 17,322.99, the Dow Jones Industrial Average dropped 1.69% to 41,583.90, and the SP 500 down 1.97% to 5,580.94. Michael Metcalfe, head of global macro strategy at State Street, said U.S. car tariffs were more harsh than expected, particularly because no adjustments were made for the country’s neighbours, Mexico and Canada.
“What I don’t know is whether the hawkishness of the auto tariffs is going to translate to the broader tariffs that we are going to get next week,” Metcalfe told the crowd. “And that is keeping risk appetite on the back foot. Gold prices reached a fresh high of $3,086.70 as the possibility of trade wars fuels a rush for the safe-haven commodity.
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