• Trump imposed high tariffs on trade partners
• US stocks and dollar fell after the announcement
• Gold hit a record high amid market uncertainty
• Fed rate cut expectations supported gold prices
• Markets await US jobs report for further insights

Gold has touched a new record high of 3,167.72 following Trump’s reciprocal tariff announcement yesterday (04/02/2025).

What happened?

President Trump, as promised before, has signed an aggressive “reciprocal tariffs” policy which implies 10% baseline tariff, significantly raising the risks of a global trade war as well as the risks for the US economic status itself.

According to the White House, bigger duties may be introduced in the coming days against those that charge higher rates on the United States.

Imposed “reciprocal tariffs” include:

• 34% – China
• 20% – EU
• 46% – Japan
• 32% – Taiwan
• 46% – Vietnam

Aftermath

Following the announcement, US stock indices futures and US dollar have pointed downward.

• -0.49% – USDInd
• -3.41% – US500
• -3.82% – Nasdaq100
• -2.82% – Dow Jones

Gold, however, has managed to reach a new record high of $3,167.72, followed by a moderate pullback to around $3,110 area.

The initial rally was driven by heightened risk aversion following Trump’s announcement, as investors sought safe-haven assets amid fears of a global trade war.

Despite the recent retreat, XAUUSD remained well-supported due to growing expectations of Federal Reserve rate cuts.

At the time of writing, markets implied a 71.3% probability of an interest rate cut during the Fed’s meeting on June 18th.

Increased central bank purchases and sustained demand for gold-backed ETFs have also extended support to the bullion.

Notably, China’s gold ETF holdings surged by 233,000 ounces, signaling strong institutional appetite for the precious metal.

Market participants are now closely monitoring the upcoming US non-farm payrolls report on Friday, which could provide further insights into the Fed’s monetary policy direction.

A weaker-than-expected jobs report could strengthen the case for rate cuts, further bolstering gold’s appeal.
According to Bloomberg, there is a 72.6% probability that XAUUSD will trade within the 7-day range of $3,036.95-$3,181.78.

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