Global Markets Stabilize Ahead of Trump’s Tariff Announcement, Gold Hits Record High

Asian equities saw a modest rebound on April 1, following Wall Street’s gains the previous day, while gold surged to a record high. Investors were awaiting details of U.S. President Donald Trump’s anticipated reciprocal tariffs, which he is set to reveal on April 2, dubbed “Liberation Day.” The Japanese yen strengthened, reflecting increased demand for traditional safe-haven assets, while U.S. Treasury yields fell. Gold continued its rally, driven by market uncertainty over the potential impact of Trump’s trade policies.

Regional stock markets found some relief after significant declines in March, driven by fears that Trump’s trade war could lead to stagflation or even a U.S. recession. In Asia, Australia’s benchmark index rose by 1%, South Korea’s KOSPI climbed 1.9%, and Taiwan’s index gained 1.7%. However, Hong Kong’s Hang Seng and Japan’s Nikkei gave up their early gains, ending flat to slightly higher. Mainland China’s blue-chip stocks remained largely unchanged after struggling throughout the session.

Markets are jittery ahead of Trump’s tariff plan, which is expected to impact global trade dynamics. Analysts note that the recent rebound in U.S. stock indices might be linked to month-end and quarter-end rebalancing, alongside short covering before the announcement. While U.S. equity markets have priced in slower growth, they are not prepared for a full recession, which could potentially drive a 10% decline in U.S. stocks.

Gold prices hit a record high for the fourth consecutive session, driven by investors’ increasing allocations amid concerns about the U.S. dollar’s stability. Treasury yields dropped, exerting downward pressure on the dollar, which weakened slightly against the yen. Meanwhile, the Australian dollar gained as the Reserve Bank of Australia maintained interest rates at 4.1%, despite global economic uncertainties.

Source: Reuters