President Trump's sweeping announcement of reciprocal tariffs today has sent tremors through global financial markets, with the Dow Jones Industrial Average experiencing volatility as his social media post declared "TODAY IS THE BIG ONE: RECIPROCAL TARIFFS!!!"
Gold prices surged in midday trading, with April gold futures reaching $2,944.00, up $16.20. The precious metal's strength, despite warmer-than-expected U.S. inflation data, reflects strong safe-haven demand amid growing uncertainty about new U.S. trade tariffs that could impact global economic growth. Silver prices showed a slight decline, with March silver down $0.095 at $32.69.
The proposed tariffs would fundamentally reshape America's trading relationships with major partners including China, the European Union, and India. Looking back at 2018, when Trump imposed tariffs focused primarily on China's $505 billion exports to America, NY Fed's Mary Amiti noted this single move vaporized $1.7 trillion from US stock prices.
The timing is particularly crucial as Indian Prime Minister Narendra Modi arrives at the White House today. As noted in their January 27 call readout, discussions included "moving toward a fair bilateral trading relationship."
"The United States has to be treated fairly and in a reciprocal fashion," Trump posted. His administration has indicated the plan will be rolled out today at around 1 p.m. ET.
MARKET IMPACT:
- Today's U.S. PPI report showed a 3.4% year-on-year rise, exceeding expectations of 3.2%
- The U.S. dollar index is trading lower
- Nymex crude oil futures are slightly down, trading around $71.25 a barrel
- The yield on the benchmark 10-year U.S. Treasury note stands at 4.533%
Technical Analysis:
Gold futures bulls maintain a strong technical advantage, with April gold's next upside target at $3,000.00. Current support levels rest at $2,925.80, with first resistance at $2,950.30. Market analysts rate the current gold position at 9.0 on the Wyckoff Market Rating scale.