Month: February 2025

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Gold rises to new high!

Gold up

Gold hits new highs in 2025 amid strong demand

Gold prices have surged to unprecedented levels in 2025, driven by robust demand and a series of global economic uncertainties.

As of early February, gold futures traded on the New York Mercantile Exchange reached a record high of $2,875 per ounce, marking a significant milestone in the precious metal’s market performance.

Stable safe haven during unstable times

The surge in gold prices can be attributed to several factors. Firstly, geopolitical tensions and economic instability have prompted investors to seek safe-haven assets. Gold, with its historical reputation as a store of value, has become a preferred choice for those looking to hedge against market volatility and inflation.

Central banks

Central banks have also played a crucial role in driving up gold prices. In 2024, global central banks added a record amount of gold to their reserves, with purchases surpassing 1,000 tons for the third consecutive year.

This trend has continued into 2025, with countries like Poland, Turkey, and India leading the way in increasing their gold holdings.

Investment demand for gold has seen a significant uptick as well. Gold exchange-traded funds (ETFs) and bars and coins have experienced strong demand, particularly from investors in China and India.

The reduction of gold import duties in India and economic uncertainties in China have further fueled this demand.

Resistance?

Despite the positive momentum, analysts caution that gold prices could face resistance levels and potential pullbacks. However, the overall outlook remains bullish, with expectations of continued strong demand and further gains in the coming months.

As the global economy navigates through these uncertain times, gold’s allure as a safe-haven asset is likely to persist, making it a key player in the financial markets.

Gold price one-year chart as of 5th February 2025 (am GMT)

Gold price one-year chart as of 5th February 2025 (am GMT)

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Trumps tariffs impact – what a difference a day makes!

U.S. tariff war

Trump pauses tariffs on Mexico and Canada amid China’s retaliatory measures

In a surprising turn of events, President Donald Trump announced a 30-day pause on tariffs targeting Mexico and Canada, just as China introduced retaliatory tariffs on a range of U.S. goods. This move comes amidst escalating trade tensions and a looming threat of a global trade war.

The decision to pause tariffs on Mexico and Canada was announced following discussions with the leaders of both countries.

Border security

Trump cited the need to address border security and drug trafficking concerns, particularly the flow of fentanyl into the United States. In response, Mexico committed to deploying 10,000 National Guard officers to the U.S. border, while Canada agreed to appoint a ‘Fentanyl Czar’ and launch a joint strike force to combat organised crime

However, while Trump’s administration has temporarily halted tariffs on Mexico and Canada, the situation with China remains tense. China swiftly introduced retaliatory tariffs on U.S. imports, including a 15% levy on coal and liquefied natural gas (LNG), and a 10% tariff on crude oil and farm equipment.

These measures are seen as a direct response to the U.S.’s 10% tariff on Chinese goods, which took effect earlier this week.

Global impact

The global economic impact of these trade disputes is significant. Analysts warn that prolonged trade tensions could lead to higher prices, disrupted supply chains, and slower economic growth.

Businesses and consumers alike are bracing for the potential fallout, with many expressing concerns about the uncertainty and instability these tariffs bring.

Despite the temporary 30-day reprieve for Mexico and Canada, Trump has indicated that tariffs could be reinstated if the countries do not meet his demands for increased border security and drug control measures.

The administration is also considering imposing tariffs on imports from the European Union, further complicating the global trade landscape.

As negotiations continue, the world watches closely to see if a resolution can be reached or if Trumps self-imposed trade war will escalate further.

The coming weeks will be crucial in determining the future of international trade relations and the economic stability of nations involved.

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Tariff Man – Trumps tariffs take affect – markets fall!

U.S. Tariffs

U.S. President Donald Trump’s tariffs have moved from threat to reality.

U.S. President Donald Trump launched a series of tariffs on Saturday. U.S. imports from Mexico and Canada will face a 25% duty, while those from China will be subject to a 10% tariff. Energy resources from Canada will face a lower 10% tariff.

Canada’s Prime Minister Justin Trudeau announced on the same day retaliatory tariffs of 25% against $155 billion in U.S. goods. Industry leaders in the U.S. have expressed concern over those tariffs.

They cap off a wild start to the new year during which a new U.S. president entered the White House and a new Chinese artificial intelligence player, DeepSeek upended the industry.

Indices at new highs

Something else that was new in January: the highest-ever closing level for the S&P 500, Dow Jones and new FTSE 100 highs were enjoyed too.

With tariffs now in effect and the possibility of a trade war looming markets may struggle to new heights in the short term.

Even Big Tech earnings and the jobs numbers coming out this week, typically market-moving reports, are likely to play second fiddle to policy developments.

Markets react

Markets are already responding to the news. Prices of oil and gold, which typically rise during periods of volatility, have increased, but Bitcoin is trading lower. It remains uncertain whether these will be a temporary shock or a sustained trend.

China’s factory activity experienced slower growth in January 2025 compared to December 2024 and is expected to be adversely affected as U.S. companies seek to reduce their dependence on Chinese imports.

Trump’s current tariffs may be targeted, but it’s hard to see any country or sector escaping the tariff turmoil.

The EU is also in line for a tariff attack and maybe the UK after.