Gold prices surged to a new all-time high on Monday, while the U.S. dollar weakened and global equities posted mixed results amid ongoing anxiety over President Donald Trump’s escalating trade tariffs and growing friction with the Federal Reserve.
With several markets still shut for the Easter holiday, trading volumes were subdued. Investors, however, remained cautious ahead of a week packed with critical economic data expected to shed light on the broader effects of the U.S.-led trade war.
Countries around the world are scrambling to reach trade deals with Washington in hopes of avoiding the full brunt of U.S. tariffs, with Japan emerging as the most prominent economy pursuing negotiations. But on Monday, China issued a stern warning to nations not to strike any agreement that undermines Beijing’s national interests.
While most countries are facing a blanket 10% tariff, China is being hit with levies as high as 145% on certain exports. In retaliation, Beijing has imposed duties of up to 125% on U.S. goods.
“Appeasement will not bring peace, and compromise will not be respected,” said a spokesperson for China’s Commerce Ministry. “To pursue short-term selfish gains at the expense of others is like seeking the skin of a tiger—it will ultimately fail and hurt all parties involved.”
The remarks came shortly after President Trump revealed that talks with China were ongoing. “Yeah, we’re talking to China,” he said last Thursday. “I think we’re going to make a very good deal.”
Investor unease over the global outlook has fueled a flight to safe haven assets, pushing gold above $3,384. The rally was supported by a declining dollar, which has been weighed down further by Trump’s recent clash with Fed Chair Jerome Powell.
Trump publicly criticized Powell last week after the Fed warned that new tariffs could temporarily drive up inflation, making interest rate cuts unlikely. The president later urged Powell to cut rates and warned, “If I want him out, he’ll be out of there real fast, believe me.”
Powell, however, stood firm, saying he had no intention of resigning early and emphasized that the central bank’s independence was “a matter of law.”
The dollar weakened across the board, with the euro and yen among the top performers.
• Euro/Dollar: Up to $1.1476 from $1.1371
• Pound/Dollar: Up to $1.3353 from $1.3270
• Dollar/Yen: Down to 141.03 from 142.33
French Finance Minister Eric Lombard commented, “Donald Trump has damaged the credibility of the dollar with his aggressive tariff policies. If Powell is forced out, the blow to U.S. financial credibility will deepen, particularly in the bond market.”
Chicago Fed President Austan Goolsbee also weighed in, telling Face the Nation on Sunday, “There’s near-universal consensus among economists that central bank independence is critical to maintaining sound monetary policy.”
Stock markets were mixed:
• Tokyo’s Nikkei 225 slipped 1.2% to 34,300.35, dragged down by the stronger yen.
• Shanghai Composite gained 0.5% to 3,292.98.
• Markets in Hong Kong, London, and New York remained closed for the holiday.
Oil prices fell amid fears of weakening global demand:
• WTI dropped 1.7% to $62.91 per barrel.
• Brent crude fell 1.7% to $66.84.
Looking ahead, investors are eyeing key manufacturing data due later this week for early signs of how Trump’s tariff strategy is affecting global supply chains.
“One thing that’s no longer up for debate is the reputational damage to the U.S. brand,” said Stephen Innes of SPI Asset Management. “It’s not going away with the next news cycle. Investors, allies, and even central banks are starting to price in American policymaking as a geopolitical risk—not a given.”