Gold and Oil Prices Skyrocket Amidst Unresolved Trade Issues: US Markets Struggle
Persistent ambiguity: American stock markets plummeting, indicating a possible economic downturn
Take a look at the latest global financial updates!
The upcoming trade discussions between the US and China have generating anticipation among investors, but there's a sense of uncertainty looming. The Wall Street reached a slight dip.
Before the weekend dialogue between the US and China aimed at tackling the trade dispute, Wall Street barely showed any movement. The Dow Jones Industrial Average, featuring premium stocks, closed 0.3% down at an impressive 41,249 points. The broader S&P 500, on the other hand, slid 0.1% to 5,651 points, while the tech-driven Nasdaq stayed put at 17,928 points.
Representatives from the world's economic powerhouses will gather in Switzerland this weekend to discuss tariffs. Market participants are hopeful that the talks could put an end to the trade war that has raised alarm bells about global economic growth. US President Donald Trump hinted at lower tariffs for Chinese imports the previous day; however, analysts remain skeptical. "No matter if tariffs are 140% or 80%, the number sounds like a difference, but if there are still 80% tariffs, most people won't buy goods," said Michael Matousek, senior trader at US Global Investors[1].
The US-UK trade agreement—a first since Trump imposed his initial tariffs last month—was agreed upon the previous day. However, key aspects are yet to be finalized, and a base tariff for imports into the US remains active.
Gold Rush
The surge in the gold price is a clear indication of the escalating concerns in the stock markets. According to David Meger, head of metals trading at High Ridge Futures, "The continuing uncertainty about tariffs is likely the primary factor influencing the gold price." The price of the precious metal—commonly known as a safe haven—increased by 0.7% to $3,327 per troy ounce[1]. On the oil front, both North Sea Brent and US WTI crude climbed around 1.7%, reaching $63.88 and $60.99 per barrel (159 liters), respectively[2].
Vandana Hari, founder of Vanda Insights, shared her perspective, "If both sides set a date for formal trade talks and agree to gradually lower high tariffs during negotiations, the oil price could potentially surge an additional $2-$3 per barrel."
Market disappointments pushed Expedia into a downward spiral. The online travel service's shares plummeted by 7.3%. In the first quarter, the company's revenue nearly hit the average of analysts' estimates at $2.98 billion. Meanwhile, the Lyft business report was well-received by investors, with a surge of 28% in its shares[2]. The company reported a first-quarter adjusted earnings of 24 cents per share, exceeding analysts' predictions of 19 cents. Additionally, the company will be repurchasing more shares. Trade Desk experienced a 18.6% share jump after its advertising company reported a first-quarter revenue and earnings that surpassed Wall Street's estimates[2].
- tackling trade disputes between the US and China
- gold price increase due to uncertainty
- impact of tariffs on global stock markets
- gold as a safe investment in times of economic uncertainty
- profits and losses of specific companies
- As the upcoming trade discussions between the US and China create anticipation among investors, the increased gold price serves as a clear indicator of the escalating concerns in the stock markets, with many viewing the precious metal as a safe haven investment during times of economic uncertainty.
- Despite the US-UK trade agreement being agreed upon, analysts remain skeptical about key aspects yet to be finalized, including a base tariff for imports into the US, which could potentially have a significant impact on global stock markets.
- Market participants are hopeful that the talks between the world's economic powerhouses in Switzerland could put an end to the trade war and lower tariffs, but agreeing on the gradual lowering of high tariffs could potentially surge the oil price by an additional $2-$3 per barrel, as suggested by Vandana Hari, founder of Vanda Insights.
