Gold Bulls Make a Comeback as Reciprocal Tariffs Take Center Stage

Gold experienced intense selling pressure mid-week but the precious metal regained traction on Thursday. This came after Trump downplayed earlier reports indicating that a de-escalation of the trade war with China was imminent. He revealed that a new tariff rate could be imposed on China in the next few weeks.

Markets responded with another selloff while gold reasserted its safe-haven appeal by seeing renewed buying interest.

On Tuesday, gold had briefly reached $3,500 per ounce but came under a bear onslaught later in the day and on Wednesday as Trump backed off his attacks on the Fed chair Powell and media reports indicated that the trade war with China would be deescalated.

On Wednesday, Trump said countries currently engaged in talks with the U.S. could see reciprocal tariffs kicking in if the talks don’t progress meaningfully (meaning, how he wants them to). He also indicated that in 2-3 weeks, a new rate of tariffs could be announced against China. These remarks sent markets tumbling and the price of gold shrugged off the selling pressure it had been under during the previous 48 hours. Bulls regained control.

On its part, China seems unwilling to blink. The country commented that for any talks to happen, tariffs must first be lifted against its products. Such rhetoric indicates that there is still a lot of ground to cover before the trade war is eased between these two countries.

On Wednesday, Scott Bessent, the Treasury Secretary, clarified that previous remarks from Trump weren’t meant to suggest that America would unilaterally deescalate the trade war. Bessent added that the U.S. had its sights on multiple factors like non-tariff barriers as well as subsidies. Tariffs were therefore only one of the factors the administration was looking at in its relationship with China.

All these reports impacted the market for gold. The central bank of Switzerland reported that it made $8 billion (CHF 6.7bn) in profit from its gold holdings in Q1 of this year. This isn’t surprising given how much the price of gold has climbed from the start of the year.

In China, gold futures dropped to levels last seen in 2013 as traders rushed to cash in their profits after news coming in from America suggested that a trade deal between America and China could be completed soon.

However, all indicators suggest that the temporary reprieve that markets had experienced after Trump postponed the date when tariffs would take effect was now over. The reality is that economic uncertainty is high, and gold’s allure is increasing in these turbulent times. The stage looks set for enterprises like Torr Metals Inc. (TSX.V: TMET) to see rising inflows from investors looking to ride the bull trend that gold is enjoying.

NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (TSX.V: TMET) are available in the company’s newsroom at https://ibn.fm/TMET

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