President Trump’s so-called ‘Liberation Day’ is upon us, and we will soon find out the details of the reciprocal tariffs that the US will impose. Market volatility has been on the rise over the past month in the lead-up to the much-anticipated April 2nd tariff announcements, and it has been tricky to try and gauge the severity or otherwise of the reciprocal tariffs that will come into effect on April 3rd. That’s because we have heard varying hints from the White House, ranging from the tariffs likely to be “lenient” but also that they may be applied to “all countries.” Soon we will find out whether Trump’s latest tariffs are of either the ‘measured’ or ‘scorched earth’ variety.
If the tariff details are more restrained than feared (for example, if they don’t apply to all countries and if there are other exemptions), then there is scope for a rebound in risk-assets to occur. But if the tariffs are more of an all-encompassing nature and applied at a hefty level north of 20%, this would do little to alleviate the growth fears financial markets have been grappling with for much of year.
The difficulty for financial markets is in trying to guess whether the tariff measures will be used an ‘just’ an intermediate bargaining tool (with a view to getting the US’s trading partners to lower their tariffs and then the US will do likewise), or if these measures will remain in place for the foreseeable future. This uncertainty aspect and the likely growth implications of an all-out, prolonged trade war have been prime contributors to financial markets’ gyrations so far in 2025.
Another week, and another record high for gold – this has been a recurring theme for the precious metal this year. Gold has been in the box seat to benefit from the markets’ heightened tariff anxiety. And that’s how it has played out on the chart this week with the spot price surging past $3100 and topping out for the time being just below $3150. If the April 2nd tariff measures and not as severe as is feared, gold may pullback. But it's hard to see the tariff story going away anytime soon, so gold will probably still be viewed as a buy on any dips. Support levels to watch on any pullbacks are at $3090, $3063 and at the psychological $3000 level. If markets become more unsettled and safe-haven buying increases, resistance awaits at $3145 and $3160.
The threat of secondary sanctions on Russian oil and escalated rhetoric from the US towards Iran has injected some risk-premium back into the oil price. The WTI price (US Crude) has stepped out of the $65-$70 range it had been operating in (trading at $70.80 early on Wednesday). Support is at $69.40, and resistance sits at $72.35. An upcoming OPEC+ meeting (where supply increases are expected to be announced) and the possibility of better US-Russian relations pose a risk to the oil price, while support could come from concerns that tariffs may restrict supply.
Looking ahead, while the Reciprocal tariff announcements are the big event of the week, we also have US non-farm payrolls figures due on Friday, which may shape expectations for the Fed’s interest rate policy. Expectations are that we will see around 140k jobs growth for March, and any downside miss on that number could put further pressure on the USD and treasury yields.
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