Investors have turned to a “safe haven” commodity which has soared in value as markets across the globe tumble in response to Donald Trump’s tariffs.
The United States President imposed sweeping 25 per cent tariffs on all steel and aluminium on Wednesday, sparking retaliatory tariffs from the European Union, alongside 25 per cent tariffs on Canada and Mexico and a 20 per cent tariff on Chinese-made imports.
Trump has also threatened to impose a 200 per cent tariff on alcohol from the EU in retaliation as fears mount the global leader’s economic policies will force the US into recession over the coming 12 months.
Markets have crashed in reaction to the policies over the past month with the Nasdaq (-13.25 per cent), S&P 500 (-9.71 per cent), Dow Jones (-8.72 per cent) and ASX 200 (-9.15 per cent) all plummeting.
Gold has emerged as investors’ favourite bid amid the sell-off, hitting a new high on Thursday and approaches the US$3000 per ounce threshold.
It jumped about 1.6 per cent over the past day and Macquarie Group now predicts it will hit US$3500 in the coming year.
Sky News Business Reporter Ed Boyd said investors were moving their cash out of businesses or stocks that could be impacted by the sell-off and were looking towards gold.
“It’s a safe haven and (I) expect Aussie gold miners to continue to do well over the coming months,” Boyd said.
Western Australian gold miner Westgold Resources jumped more than eight per cent on Thursday and has so far leaped about another six per cent since the market opened on Friday.
Gold miner Regis Resources has risen more than 11 per cent since the close of the market on Wednesday while American-based gold miner Newmont Corporation, which operates mines in WA and the Northern Territory, is up about five per cent on Friday.
Boyd predicted gold miners will continue to do well on ASX on Friday, while it was a mixed bag for other sectors on the market.
“Expect gold miners today to do well on the market. Other sectors, probably not so well,” Boyd said.
“It’s probably worth looking at … the energy sector and retailers. People turn to defensive stocks and healthcare companies in times like this too but expect gold miners today to be some of the best performers.”
The ASX has so far see-sawed on Friday, initially dropping before climbing up about half a per cent.
Alongside gold, silver has also jumped in the past day and is up almost five per cent over the past month.
