Market Review: Gold, Oil, Geopolitics & Tariffs - A Comprehensive Overview

Market Performance Overview

Global financial markets experienced significant movements this week, driven by a combination of factors including monetary policy shifts, major geopolitical events, and tariff adjustments impacting global trade. Here's a detailed breakdown of the performance across key sectors:

US Dollar Index

The US Dollar Index generally declined this week, closing at 98.24. This decrease was primarily attributed to President Trump's nomination of a more dovish Fed governor, boosting market expectations for future interest rate cuts. The dollar was also continually affected by concerns over political interference in monetary policy.

Gold and Silver

Spot gold continued its strong trajectory, recording its second consecutive week of gains, closing at $3397.37 per ounce. Gold prices were buoyed by rising market expectations of interest rate cuts by the Federal Reserve, along with news of the US imposing a new tariff on 1-kilogram gold bars. However, subsequent reports suggested this news may have been a misinterpretation by a White House official. New York gold futures surged to a record high of $3534 per ounce. Spot silver also demonstrated strong performance, recording gains for six consecutive trading days, closing the week at $38.31 per ounce, up 3.53%.

Foreign Currencies

The British pound showed strong performance this week, nearing two-week highs. Despite an interest rate cut by the Bank of England, a significant split in the vote led to expectations of a stronger pound. The US dollar against the Japanese yen was generally volatile this week, while the Euro against the US dollar recorded gains, but ongoing trade negotiations limited the Euro's rise.

Global Oil Prices

A large increase in OPEC+ production offset concerns about potential supply shortages caused by sanctions on Russian oil. The upcoming meeting between Trump and Putin also increased traders' expectations of a ceasefire between Russia and Ukraine, leading to a decline in global oil prices for seven consecutive trading days.

Risk Assets

The Dow Jones Industrial Average showed mixed performance this week but generally recorded slight gains. The Nasdaq Composite experienced a strong rebound, as investors expressed optimism about the prospects for interest rate cuts, AI growth, and corporate earnings. The S&P 500 generally rose this week, but its gains were less than those of the Nasdaq. Cumulatively, the Dow Jones rose 1.35% this week, the S&P 500 rose 2.43%, and the Nasdaq rose 3.87%.

Key Economic and Political Events

Notable events this week included President Trump's tariffs on numerous countries, the controversial decision to impose a tariff on 1-kilogram gold bars, and the potential meeting between Trump and Putin to discuss a ceasefire in Ukraine. Additionally, the nomination of Stephen Moore to the Federal Reserve Board and comments from Fed officials regarding potential rate cuts were among the key developments influencing the markets.

This was an eventful week for global financial markets, with a diverse range of factors contributing to market volatility. Investors will closely monitor future developments in monetary policy, geopolitical events, and trade policies to anticipate future market movements.