{"id":6892,"date":"2025-04-12T14:04:00","date_gmt":"2025-04-12T18:04:00","guid":{"rendered":"https:\/\/sharewatch.com\/wp\/2025\/04\/12\/tariff-angst-sinks-the-dollar-and-boosts-gold-to-a-record-high\/"},"modified":"2025-04-12T14:04:00","modified_gmt":"2025-04-12T18:04:00","slug":"tariff-angst-sinks-the-dollar-and-boosts-gold-to-a-record-high","status":"publish","type":"post","link":"https:\/\/sharewatch.com\/wp\/2025\/04\/12\/tariff-angst-sinks-the-dollar-and-boosts-gold-to-a-record-high\/","title":{"rendered":"Tariff Angst Sinks the Dollar and Boosts Gold to a Record High"},"content":{"rendered":"<div class=\"layout__region nsdq-l-grid__item syndicated-article-body\">\n<section class=\"jupiter22-c-article-body\">\n<div class=\"body\">\n<div class=\"body__content\">\n<p>The dollar index (DXY00) Friday fell by -0.80% and posted a 3-year low.\u00a0The dollar retreated Friday because of concerns that the escalation of the US-China trade war would derail the economy and lead to stagflation.\u00a0 On Friday, China raised tariffs on all US goods to 125% from 84% in retaliation for the US raising tariffs on Chinese goods to 145%.\u00a0 The dollar is also facing a confidence crisis as the US renegotiates its relationships with its trading partners, diminishing its reserve-currency status and prompting some foreign investors to liquidate their dollar assets.\u00a0The dollar sank to its lows Friday after the University of Michigan US Apr consumer sentiment index fell more than expected to a 2-3\/4 year low. \u00a0In addition, the dollar was pressured by Friday\u2019s Fed-friendly PPI report that showed March producer prices unexpectedly eased, a dovish factor for Fed policy.\u00a0<\/p>\n<p>Hawkish Fed comments Friday lifted the dollar off of its lows.\u00a0 Minneapolis Fed President Kashkari said the potential inflationary impact of tariffs makes the Fed less likely to lower interest rates, even in the face of a weakening economy.\u00a0 Also, New York Fed President Williams said, \u201cThe current modestly restrictive stance of monetary policy is entirely appropriate given the solid labor market and inflation still above our 2% goal.\u201d He added that he expects slower economic growth, higher unemployment, and a pickup in inflation due to the US tariff policy and reduced immigration.<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag--14\"  class=\"btf-bodymidpagetwothirdswidth-1\">          <script type=\"text\/javascript\">         googletag.cmd.push(function() {             \/\/ Check if ID matches ID in the window.adsList array before calling googletag.display             function isAdInAdsList(id) {             for (var i = 0; i < window.adsList.length; i++) {                 if (window.adsList[i].id === id) {                     return true;                 }             }             return false;         }         if (isAdInAdsList('js-dfp-tag--14')) {             googletag.display('js-dfp-tag--14');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>     <span>Join 200K+ Subscribers: <\/span> Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.  <\/p>\n<p>\u00a0<\/p>\n<p>St. Louis Fed President Musalem warned of stagflation in the US economy from tariffs, saying there\u2019s a near-term risk that inflation will rise while the labor market weakens.<\/p>\n<p>US Mar PPI final demand unexpectedly eased to +2.7% y\/y from +3.2% y\/y in Feb, better than expectations of an increase to +3.3% y\/y and the slowest pace of increase in 6 months.\u00a0Mar PPI ex-food and energy also unexpectedly eased to +3.3% y\/y from +3.6% y\/y in Feb, better than expectations of an increase to +3.6% y\/y.<\/p>\n<p>The University of Michigan US Apr consumer sentiment index fell -6.2 to a 2-3\/4 year low of 50.8, weaker than expectations of 53.5.<\/p>\n<p>The University of Michigan US Apr 1-year inflation expectations jumped to 6.7%, higher than expectations of 5.2% and the highest since 1981.\u00a0 Also, Apr 5-10 year inflation expectations rose to 4.4%, higher than expectations of 4.3% and the highest since 1991.<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-m0M\"  class=\"btf-bodymidpagetwothirdswidth-2\">          <script type=\"text\/javascript\">         googletag.cmd.push(function() {             \/\/ Check if ID matches ID in the window.adsList array before calling googletag.display             function isAdInAdsList(id) {             for (var i = 0; i < window.adsList.length; i++) {                 if (window.adsList[i].id === id) {                     return true;                 }             }             return false;         }         if (isAdInAdsList('js-dfp-tag-m0M')) {             googletag.display('js-dfp-tag-m0M');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>The markets are discounting the chances at 25% for a -25 bp rate cut after the May 6-7 FOMC meeting, down from a 30% chance last week.<\/p>\n<p>EUR\/USD (^EURUSD) Friday rose by +1.21% and posted a 3-year high.\u00a0The euro rallied sharply for a second session on Friday due to the plunge in the dollar.\u00a0 The euro also has carryover support from Wednesday when President Trump paused reciprocal tariffs, which may keep the Eurozone economy from falling into recession and reduce expectations on how much the ECB needs to keep easing monetary policy.\u00a0 \u00a0<\/p>\n<p>Swaps are discounting the chances at 95% for a -25 bp rate cut by the ECB at the April 17 policy meeting.<\/p>\n<p>USD\/JPY (^USDJPY) Friday fell by -0.58%.\u00a0 The yen moved higher Friday for a second session and posted a 6-1\/4 month high against the dollar.\u00a0 Escalation of the US-China trade war has boosted safe-haven demand for the yen after China raised tariffs on all US goods to 125% from 84% in retaliation for the US raising tariffs on Chinese goods to 145%. \u00a0Also, Friday\u2019s nearly -3% slide in the Nikkei Stock Index has boosted safe-haven demand for the yen. \u00a0The yen fell back from its best levels after the 10-year T-note yield rose to an 8-week high.\u00a0<\/p>\n<p>June gold (GCM25) Friday closed up +67.10 (+2.11%), and May silver (SIK25) closed up +1.151 (+3.74%).\u00a0 Precious metals on Friday extended this week\u2019s rally, with June gold posting a contract high and nearest-futures (J25) gold climbing to a new all-time high of $3,235.00 an ounce. \u00a0Silver prices also posted a 1-week high. \u00a0Friday\u2019s selloff in the dollar to a 3-year low is a major bullish factor for precious metals.\u00a0Also, the escalation of the US-China trade war is boosting safe-haven demand for precious metal after China on Friday raised tariffs on all US goods to 125% from 84% in retaliation for the US raising tariffs on Chinese goods to 145%. \u00a0In addition, geopolitical risks in the Middle East are boosting safe-haven demand for precious metals after the Israel-Hamas ceasefire broke down and as the US threatened more strikes on Yemen\u2019s Houthi rebels.\u00a0 Fund buying of gold supports prices after long gold positions in ETFs rose to a 1-1\/2 year high Thursday.\u00a0<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-J0g\"  class=\"btf-bodymidpagetwothirdswidth-3\">          <script type=\"text\/javascript\">         googletag.cmd.push(function() {             \/\/ Check if ID matches ID in the window.adsList array before calling googletag.display             function isAdInAdsList(id) {             for (var i = 0; i < window.adsList.length; i++) {                 if (window.adsList[i].id === id) {                     return true;                 }             }             return false;         }         if (isAdInAdsList('js-dfp-tag-J0g')) {             googletag.display('js-dfp-tag-J0g');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>Hawkish comments Friday from Minneapolis Fed President Kashkari were bearish for precious metals when he reiterated that the potential inflationary impact of tariffs makes the Fed less likely to lower interest rates.\u00a0 Also, the upside in silver prices may be limited by concern that an escalation of the trade war could derail the global economy and the demand for industrial metals.\u00a0<\/p>\n<p class=\"body__disclaimer\">     On the date of publication,      Rich Asplund              did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy          here. <\/p>\n<\/p>\n<p class=\"body__disclaimer\">The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/section>\n<p>        <script type=\"text\/javascript\">   \/\/ add oddAd class to every odd instance of body .ads__inline for different placeholder styles   let articleAds = document.querySelectorAll('.ads__inline');   for (let i = 0, len = articleAds.length; i < len; i++) {     \/\/ Do the below only if the curent count is less than 12     if ((i < 12) &#038;&#038; (i % 2 === 0)) {       articleAds[i].className += ' oddAd';     }   } <\/script>                                               <\/p>\n<div class=\"jupiter22-c-tags jupiter22-c-tags-default\">\n<h3 class=\"jupiter22-c-tags-title\">         Tags       <\/h3>\n<div class=\"jupiter22-c-tags-container\">Stocks<\/div>\n<\/p><\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The dollar index (DXY00) Friday fell by -0.80% and posted a 3-year low.\u00a0The dollar retreated Friday because of concerns that the escalation of the US-China trade war would derail the economy and lead to stagflation.\u00a0 On Friday, China raised tariffs on all US goods to 125% from 84% in retaliation for the US raising tariffs 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