Gold prices fell further from recent record highs on Friday despite a number of positive catalysts.
Spot gold fell 0.7 percent to $3,092.92 per ounce in early European trade after hitting a record high in early April. U.S. gold futures were down 0.2 percent at $3,114.31.
Selling pressure in gold could be primarily due to profit booking after a significant run over the last 12 months. Bullion is up nearly 35 percent over the last year.
The recent surge was driven by tariff concerns, geopolitical risks, declining U.S. dollar, and growing inflation forecasts.
According to UBS, the latest tariff measures unveiled by U.S. President Trump may knock down U.S. economic growth by 2 percentage points this year and raise inflation close to 5 percent.
A U.S.-based analyst from Morningstar has forecast a 38 percent decline in gold prices in the coming years, despite an uncertain economic environment.
On the contrary, some financial institutions remain optimistic about bullion’s future. Bank of America has predicted that gold could rise to $3,500 per ounce in the next two years. Goldman Sachs expects a year-end price of $3,300 per ounce.
As growth worries mount, there is now increased speculation that the Federal Reserve could accelerate interest rates to make it easier for U.S. companies and households to borrow and spend.
The release of the monthly U.S. jobs report as well as remarks by Federal Reserve Chair Jerome Powell may influence trading later in the day.
Oil prices were down around 4 percent on Friday, and were on track for their worst week in months on concerns about a global recession that could weigh on oil demand.
Benchmark Brent crude futures tumbled 3.6 percent to $67.63 in early European trade while WTI crude futures were down 3.8 percent at $4.38.
Both contracts declined more than 6 percent on Thursday after U.S. President Donald Trump announced significantly harsher-than-expected tariffs.
According to UBS, the latest tariff measures unveiled by Trump may knock down U.S. economic growth by 2 percentage points this year and raise inflation close to 5 percent.
JPMorgan has raised the probability of a global recession this year to 60 percent, from a previous 40 percent.
Adding to investor anxiety, OPEC+ unexpectedly increased the supply by three times the planned amount in May.
A statement from OPEC said Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman have agreed to increase production by 411,000 barrels per day in May.
The oil cartel noted the increase in production comprises the increment originally planned for May in addition to two monthly increments.
Goldman Sachs has significantly lowered its oil price forecasts for 2025 and 2026, citing OPEC+’s increased production and the potential for a global recession.
Nonfarm payrolls in March increased 228,000 for the month, up from the revised 117,000 in February and better than the Dow Jones estimate for 140,000.
Health care was the leading growth area, consistent with prior months. The industry added 54,000 jobs, almost exactly in line with its 12-month average.
Average hourly earnings increased 0.3% on the month, in line with the forecast, while the annual rate of 3.8%, the lowest level since July 2024.
China on Friday struck back at the U.S tariffs imposed by President Donald Trump with a slew of countermeasures including extra levies of 34 per cent on all U.S. goods and export curbs on some rare earths, deepening the trade war between the world’s two biggest economies.
Beijing also imposed restrictions on about 30 U.S. organizations, mostly in defence-related industries, adding to the already two dozen U.S companies punished over Trump’s tariffs.
Beijing’s sweeping retaliation comes after Trump slapped the world’s No. 2 economy with additional 34 per cent tariffs on Chinese goods, bringing the total new levies this year to 54 per cent. Trump also closed a trade loophole that had allowed low-value packages from China to enter the U.S duty-free.
“The U.S move is not in line with international trade rules, seriously undermines China’s legitimate and lawful rights and interests, and is a typical unilateral bullying practice,” China’s finance ministry said.
China called the new round of U.S tariffs a “blatant” violation of World Trade Organization rules and have requested consultations at the WTO.
Trump accused China of panicking in a comment on Truth Social.
“China played it wrong, they panicked – the one thing they cannot afford to do!,” he wrote on Friday.
China’s finance ministry matched U.S. duties with additional tariffs of 34 per cent on all U.S. goods from April 10, on top of the 10 per cent-15 per cent tariffs it imposed on some U.S. agriculture goods in March and 10 per cent-15 per cent tariffs on some energy and farming machinery in February.
Agricultural trade took a deeper hit as Chinese customs imposed an immediate suspension on imports of U.S. sorghum from C&D (USA) INC, as well as inbound shipments of poultry and bone meal from three U.S. firms.
China’s biggest imports from the U.S. are soybeans, oilseeds and grains, amounting to $13.4-billion in 2024, as well as $14.7-billion of various fuels and $15.3-billion of electrical machinery, according to U.S. trade data.
“With 34 per cent tariff it will not be possible for U.S. agricultural products to enter China. It is an opportunity for other exporters like Brazil and Australia to increase their market share in China,” said Ole Houe, director of advisory services at IKON Commodities in Sydney.
“As the old Chinese saying goes: ‘Courtesy demands reciprocity’,” said Guo Jiakun, a spokesperson at the Chinese foreign ministry, in a post on Facebook after the announcement of the Chinese countermeasures.
Beijing also announced controls on exports of medium and heavy rare-earths including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium to the United States, effective April 4.
It added 16 U.S. entities to its export control list, which prohibits exports of dual-use items to the affected firms. The affected include 15 companies in industries including defence and aerospace, as well as non-profit group Coalition For A Prosperous America, which in the past had advocated for the Trump administration to decouple the U.S. economy from China.
Another 11 U.S. entities were added to the “unreliable entity” list, which allows Beijing to take punitive actions against foreign entities. The targeted firms include Skydio Inc. and BRINC Drones over arms sales to democratically governed Taiwan, which China claims as part of its territory.
It also launched an anti-dumping probe into imports of certain medical CT tubes from the U.S. and India, as well as an investigation into Dupont China Group, a subsidiary of the U.S. firm DuPont, for alleged violation of China’s anti-monopoly law.
“The application of the export controls on these key materials plus some of these additions to the unreliable entity list reflects China’s growing tool-kit to retaliate in trade wars,” said the Mercator Institute for China Studies’ lead analyst for the economy Jacob Gunter.
The Chinese yuan has dropped to its lowest level in seven weeks and stock markets slumped on Thursday after Trump unveiled his reciprocal tariffs that were particularly heavy on China.
Trump has ordered the U.S. Trade Representative to determine whether China was living up to its commitments under the 2020 “phase 1″ U.S.-China trade agreement by April 1.
The deal required China to increase purchases of U.S exports by $200-billion over a two-year period, but Beijing failed to meet its targets when the COVID-19 pandemic struck.
China bought $154-billion in U.S goods in 2017, before the trade war began, Chinese customs data shows, and that figure rose to $164-billion last year.
“I used to buy some American products, but if the price increases I might buy less,” said Huang Zhe, 24, who works in China’s luxury sector.
Global markets slid further and North American indexes were on track for another day of crushing losses Friday after China responded to U.S. President Donald Trump’s latest set of tariffs with some of their own.
Canada’s main stock index dropped on Friday, led by losses in energy and mining stocks, amid a global selloff deepened by China’s countermeasures.
At 12 p.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 996.98 points, or 4.1%, at 23,338.79.
The index ended down 3.8% at 24,335.77 on Thursday, its lowest closing level since March 13. It was the biggest decline for the index since June 2020, shortly after the start of the COVID-19 crisis.
The S&P 500 was down 3.8% in midday trading, after earlier dropping more than 5%, following its worst day since COVID wrecked the global economy in 2020. The Dow Jones Industrial Average was down 1,349 points, or 3.3%, and the Nasdaq composite was 3.8% lower.
So far there are few, if any, winners in financial markets from the trade war. European stocks saw some of the day’s biggest losses, with indexes sinking roughly 4%. The price of crude oil tumbled to its lowest level since 2021. Other basic building blocks for economic growth, such as copper, also saw prices slide on worries the trade war will weaken the global economy.
China’s response to U.S. tariffs caused an immediate acceleration of losses in markets worldwide. The Commerce Ministry in Beijing said it would respond to the 34% tariffs imposed by the U.S. on imports from China by imposing a 34% tariff on imports of all U.S. products beginning April 10. The United States and China are the world’s two largest economies.
Markets briefly recovered some of their losses after the release of Friday morning’s U.S. jobs report, which said employers accelerated their hiring by more last month than economists expected. It’s the latest signal that the U.S. job market has remained relatively solid through the start of 2025, and it’s been a linchpin keeping the U.S. economy out of a recession.
But that jobs data was backward looking, and the fear hitting financial markets is about what’s to come.
“The world has changed, and the economic conditions have changed,” said Rick Rieder, chief investment officer of global fixed income at BlackRock.
The central question is: Will the trade war cause a global recession? If it does, stock prices will likely need to come down even more than they have already. The S&P 500 is down roughly 15% from its record set in February.
Much will depend on how long Trump’s tariffs stick and what kind of retaliations other countries deliver. Some of Wall Street is holding onto hope that Trump will lower the tariffs after prying out some “wins” from other countries following negotiations. Otherwise, many say a recession looks likely.
For his part, Trump has said Americans may feel “some pain” because of tariffs, but he has also said the long-term goals, including getting more manufacturing jobs back to the United States, are worth it. On Thursday, he likened the situation to a medical operation, where the U.S. economy is the patient.
“For investors looking at their portfolios, it could have felt like an operation performed without anesthesia,” said Brian Jacobsen, chief economist at Annex Wealth Management.
But Jacobsen also said the next surprise for investors could be how quickly tariffs get negotiated down. “The speed of recovery will depend on how, and how quickly, officials negotiate,” he said.
Vietnam said its deputy prime minister would visit the U.S. for talks on trade, while the head of the European Commission has vowed to fight back. Others have said they were hoping to negotiate with the Trump administration for relief.
Trump criticized China’s retaliation on Friday, saying on his Truth Social platform that “CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!”
On Wall Street, stocks of companies that do lots of business in China fell to some of the sharpest losses.
DuPont dropped 11.3% after China said its regulators are launching an anti-trust investigation into DuPont China group, a subsidiary of the chemical giant. It’s one of several measures targeting American companies and in retaliation for the U.S. tariffs.
GE Healthcare got 12.3% of its revenue last year from the China region, and it fell 13.3%.
In the bond market, Treasury yields continued their sharp drop as worries rise about the strength of the U.S. economy. The yield on the 10-year Treasury tumbled to 3.94% from 4.06% late Thursday and from roughly 4.80% early this year. That’s a major move for the bond market.
The Federal Reserve could cut its main interest rate to relax the pressure on the economy, as it was doing late last year before pausing in 2025. But it may have less freedom to move than it would like.
Fed Chair Jerome Powell said in written remarks being delivered in Arlington, Virginia that tariffs could also drive up expectations for inflation. That could be even more damaging than high inflation itself, because it can drive behavior that begins a vicious cycle that only worsens inflation. U.S. households have already said they’re bracing for sharp increases to their bills.
“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said.
That could indicate a hesitance to cut rates because lower rates can give inflation more fuel.
In stock markets abroad, Germany’s DAX lost 4.3%, France’s CAC 40 dropped 3.7% and Japan’s Nikkei 225 fell 2.8%.
Canada shed 33,000 jobs in March, the worst month for the labour market in three years, as the threat of U.S. tariffs weighed on business confidence and slowed hiring.
Job declines were widespread across industries, and concentrated in full-time positions and private sector employment, Statistics Canada reported Friday. The unemployment rate ticked up to 6.7 per cent from 6.6 per cent in February. Bay Street analysts had expected a small increase in employment.
The March Labour Force Survey, conducted from March 9 to 15, is the first piece of hard data showing the effect of U.S. President Donald Trump’s trade war against Canada.
It’s too early to see a direct impact of U.S. tariffs, which were imposed throughout March and early April on Canadian goods that don’t comply with the United States-Mexico-Canada Agreement, as well as on steel, aluminum and automobiles. However, the threat of tariffs has shaken Canadian consumer and business confidence, which appears to be weighing on the labour market.
Following the publication of the data, financial markets upped their bets on another interest rate cut from the Bank of Canada at its next meeting on April 16. Traders now put the odds of another quarter-point cut at around 65 per cent, much higher than in recent weeks, according to LSEG data. Another cut would take the central bank’s policy rate to 2.5 per cent.
“The wheels may be starting to come off the Canadian labour market,” Andrew Grantham, Canadian Imperial Bank of Commerce senior economist, wrote in a note to clients. He noted that Canada’s job market had been fairly solid through the second half of last year and into January.
“However, the concerning recent trend, combined with the likelihood of further weakness ahead as US tariffs start to impact hiring decisions, leans towards further reductions in interest rates from the Bank of Canada, although the timing will depend on next week’s business and consumer surveys as well as global risk sentiment,” Mr. Grantham wrote.
Statscan said layoff rates from February to March were in line with typical levels for that time of year, suggesting the weakness was more the result of slower hiring and normal attrition than outright layoffs.
The Canadian numbers stood in contrast to U.S. jobs data, also released Friday. U.S. employers added 228,000 new positions in March, well ahead of Wall Street expectations of 140,000. Although earlier payroll figures for January and February were revised down by 48,000.
This suggests that the U.S. labour market was in relatively good shape as Mr. Trump embarked on his protectionist push to remake the global trading system. But that could change quickly.
Mr. Trump’s decision to impose sweeping tariffs on America’s trading partners this week has tanked financial markets and raised the odds of a recession. On Friday, China retaliated against the U.S. with a 34-per-cent duty on all U.S. goods, raising the prospect of spiralling global trade war.
“It’s an historical footnote on the economy that was before ruinous trade wars erupted,” Derek Holt, head of capital markets economics at Bank of Nova Scotia wrote in a note to clients about the U.S. jobs numbers.
In Canada, the Statscan data showed an unequal impact across provinces. Ontario lost around 28,000 jobs and the unemployment rate ticked up two notches to 7.5 per cent. Alberta and Quebec lost around 15,000 and 5,000 jobs respectively. Saskatchewan was the outlier, adding around 6,000 jobs, while employment remained fairly flat in most other provinces.
The wholesale and retail sector lost 29,000 jobs while the information, culture and recreation sector lost 20,000. Employment fell by a smaller amount in business support services, agriculture, manufacturing and construction. This was partially offset by increases in several sectors, including “other services” and transportation and warehousing.
“While US tariffs will be the obvious culprit for the fall in employment in March, two-thirds of the decline was concentrated in the services sector, suggesting that other factors were at play,” Bradley Saunders, North America economist at Capital Economics wrote in a note to clients.
“Nonetheless, the broad-based weakness in last month’s Labour Force Survey does not bode well for the outlook, especially with timely surveys showing firms’ hiring intentions falling sharply.”
Total hours worked rose 0.4 per cent following a 1.3 per cent decline in February – one of the few bright spots in the data. Average hourly wages were up 3.6 per cent year-over-year compared to 3.8 per cent in February.
Private sector employment in the U.S. increased by more than expected in the month of March, according to a report released by payroll processor ADP on Wednesday.
ADP said private sector employment jumped by 155,000 jobs in March after climbing by an upwardly revised 84,000 jobs in February.
Economists had expected private sector employment to grow by 105,000 jobs compared to the addition of 77,000 jobs originally reported for the previous month.
“Despite policy uncertainty and downbeat consumers, the bottom line is this: The March topline number was a good one for the economy and employers of all sizes, if not necessarily all sectors,” said ADP chief economist Nela Richardson.
The report said the manufacturing sector delivered stronger-than-average job gains for the second straight month, adding 21,000 jobs.
Meanwhile, ADP said construction hiring slowed, while the natural resources and trade, transportation, and utilities sectors lost jobs.
ADP also said year-over-year pay gains slowed to 4.6 percent for job-stayers and to 6.5 percent for job-changers. The1.9 percentage point pay premium for job-changers matches a series low last seen in September.
On Friday, the Labor Department is scheduled to release its more closely watched report on employment in the month of March, which includes both public and private sector jobs.
Economists currently expect employment to increase by 140,000 jobs in March after climbing by 151,000 jobs in February. The unemployment rate is expected to remain unchanged at 4.1 percent.
A report released by the Energy Information Administration on Wednesday unexpectedly showed a sharp increase by U.S. crude oil inventories in the week ended March 28th.
The EIA said crude oil inventories surged by 6.2 million barrels last week after slumping by 3.3 million barrels in the previous week. Economists had expected crude oil inventories to decrease by 2.0 million barrels.
Nonetheless, at 439.8 million barrels, U.S. crude oil inventories remain about 4 percent below the five-year average for this time of year, the report said.
The report also said distillate fuel inventories, which include heating oil and diesel, crept up by 0.3 million barrels last week but are about 6 percent below the five-year average for this time of year.
Meanwhile, the EIA said gasoline inventories decreased by 1.6 million barrels last week but remain 2 percent above the five-year average for this time of year.
The price of crude moved to the downside during trading on Tuesday, giving back ground after surging to its highest closing level over a month on Monday.
After spiking $2.12 or 3.1 percent to $71.48 a barrel in the previous session, crude for May delivery fell $0.38 or 0.5 percent to $71.10 a barrel.
The pullback by the price of crude oil came as traders await U.S. President Donald Trump’s reciprocal tariffs announcement on April 2 to assess the impact on fuel demand.
A report from the Washington Post this morning said White House aides have drafted a proposal to impose tariffs of around 20 percent on most imports to the U.S.
However, the Washington Post noted White House advisers cautioned that several options are on the table and no final decision has been made.
Concerns over tighter global supply also remained in focus after Trump threatened Russia with tariffs and vowed to continue strikes on Yemen’s Houthi rebels until they no longer pose a threat to global shipping.
He also issued a stern warning to Iran, stating that the “real pain is yet to come.”
Iran’s Supreme Leader Ayatollah Ali Khamenei warned the U.S. would receive a strong blow if it acted on Trump’s threat to bomb unless Tehran reaches a new nuclear deal with Washington.
