Prices & Review

Overview (April 2025)

The metals have had a roller coaster ride in April, selling off sharply as President Donald Trump announced his hard hitting reciprocal tariffs, which were then selectively escalated as countries reciprocated. At one stage some tariffs on Chinese imports were set at an absurd 249%, with a 24% tariff on im-ports from Japan and 20% on those from Europe. At the peak in distress, the base metals were down by an average of 17.8%, led by a 24.7% drop in tin, with copper off 20.3%. Even gold fell 6.6% as investors sold liquid assets as they needed to raise money for margin calls against less liquid assets.

During this period, the US Dow Jones Indus-trial Average fell 17%, US 10-year treasury notes fell by 4.4% and the US Dollar Index fell 8.8%. The self-inflicted pain Trump was causing the US prompted a rethink on April 9, when Trump announced, he would delay implementing the reciprocal tariffs for 90 days, which enabled the market to breathe and recuperate. Since the lows, the base metals have rebounded by an average of 9.7% and gold has shot up to a new high at $3,500 per oz, some 10.5% above the previous high set before the sell-off. Gold prices are now up by 34% since the start of the year. The Dow Jones has also recovered to 40,000 having being as low as 36,500.

The strength of gold highlights the broad-based concern the market has about Trump’s approach to trade, the global economy and geopolitics. The sell-off in the Treasury markets that saw US ten-year treasury yields spike to 4.49% on April 11, from 4% in early-April seems to have been triggered by foreign investors voting with their feet. The question is, will they return? If confidence in the U.S. to safe-guard the global financial system deteriorates, the consequences for the country could be far-reaching – undermining its ability to service its $36 trillion federal debt, let alone secure additional borrowing. As more investors and central banks question the U.S. dollar’s status as the world’s reserve currency, it’s no surprise to see gold continue to gain ground.

On balance, the markets have a few months to tread-water until Trump decides where to go with tariffs. If softer trade deals start to be agreed then confidence is likely to return, but with Trump in the driver’s seat there is no room for complacency.