Gold Prices Rebound Amid Doubts Over US-China Deescalation

Glendon

Commodity

Economic

China–U.S. Trade War

Summary:

Gold prices rose sharply in Asian trade on Thursday, rebounding from recent losses as doubts over a deescalation...

Gold prices rose sharply in Asian trade on Thursday, rebounding from recent losses as doubts over a deescalation in the U.S.-China trade war persisted, while a new Russia-Ukraine clash also buoyed haven demand.

Gold had fallen from record highs this week after U.S. President Donald Trump raised the prospect of eventually reducing steep trade duties on China. But a lack of clarity on Trump’s comments, coupled with less optimistic statements from other officials, made gold’s fall short-lived.

Traders remained cautious towards the dollar and Treasuries, keeping gold and the Japanese yen as the main sources of safe haven.

Spot gold rose 1.3% to $3,331.34 an ounce, while gold futures expiring in June rose 1.4% to $3,341.25/oz by 01:37 ET (05:37 GMT).

JP Morgan forecast that spot prices could rise as high as $4,000/oz by next year.

Gold remains near record high amid steady haven demand

Spot prices remained in sight of a $3,500/oz record high hit earlier this week, as traders still remained largely biased towards bullion as a haven.

This trend was furthered by a sharp drop in the dollar in recent weeks, amid heightened uncertainty over the U.S. economy and a bitter trade war between Washington and Beijing.

Trump said this week that he could eventually lower his steep, 145% tariffs on China. But he said that such a move would be contingent on China coming to the negotiating table- a scenario Beijing has shown little interest in carrying out.

China retaliated with 125% tariffs against the U.S., and has shown few signs of backing down.

Comments from other members of the Trump administration also undermined optimism over a U.S.-China deescalation. Treasury Scott Bessent warned that trade talks with China could be a slog, and that the U.S. would likely need to first cut tariffs before engaging with Beijing.

Traders remained on edge over the potential impact of Trump’s tariffs, even as a report suggested he could offer some exemptions to automakers. But the dollar and Treasuries took little support from this.

Other precious metals were mixed on Thursday, but were sitting on some gains against a softer dollar in recent weeks. Platinum futures rose 0.1% to $979.75/oz, while silver futures fell 0.4% to $33.390/oz.

Among industrial metals, benchmark copper futures on the London Metal Exchange fell 0.1% to $9,371.35 a ton, while U.S. copper futures steadied at $4.8348 a pound.

Russia-Ukraine ceasefire talks waver, Moscow attacks Kyiv

Safe haven demand was also furthered by signs of increased friction in U.S.-brokered ceasefire discussions over Russia and Ukraine, especially as Moscow launched a deadly drone and missile attack on Kyiv on Wednesday.

This came as Trump lashed out against Ukrainian President Volodymyr Zelenskiy over his objection to Russia’s 2014 occupation of Crimea.

Trump’s Vice President JD Vance warned that the U.S. could exit ceasefire discussions, while several top-level U.S. officials dropped out of ceasefire talks in London this week.

Source: Investing

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Daily News

[Quick Facts]

1. Trump considers partial tariff exemptions for automakers

2. Beige Book: “Tariffs” were mentioned 107 times! The economic outlook has deteriorated significantly in many regions

3. Knot: A neutral policy stance is appropriate as shocks continue to unfold

4. March U.S. new home sales surge, surpassing forecasts, led by gains in the South

5. U.S. tariff revenue surges over 60% in April, reaching at least US$15 billion

[News Details]

Trump considers partial tariff exemptions for automakers

According to the Financial Times, President Trump is contemplating exemptions from certain stringent tariffs for automotive manufacturers, representing a concession following recent lobbying efforts by industry executives amidst the ongoing trade war. However, the 25% tariff on all imported finished vehicles will remain in effect. Another 25% tariff on automotive components will also be retained, with an effective date of May 3. Despite the prior exclusion of automotive products from "reciprocal" tariffs with major trading partners, U.S. automakers are currently seeking further exemptions.

These concessions signify an initial victory for the automotive sector and another retreat by Trump from his most aggressive tariff positions. Sources indicate that current negotiations primarily focus on streamlining the taxation process, such as relaxing the rules of origin requirements for automotive components. This policy adjustment reflects the Trump administration's pragmatic response to specific industry pressures while upholding the core tenets of its "America First" trade policy.

Beige Book: “Tariffs” were mentioned 107 times! The economic outlook has deteriorated significantly in many regions

In the Federal Reserve's Beige Book released on Wednesday, the term "tariffs" was cited 107 times, more than double the frequency in the previous report. "Uncertainty," in various forms, appeared 89 times. Economic activity showed minimal change since the last report, yet uncertainty surrounding international trade policies was a recurring theme across reports. Only five regions reported modest economic expansion, three indicated stable activity, and the remaining four noted a slight contraction.

Overall, both leisure and business travel have declined, with a decrease in international tourism in certain regions. Housing sales have increased, and many regions continue to experience low inventory levels. Net loan demand has remained flat or slightly increased, while non-financial services demand has decreased in some regions. Transportation activity has seen a modest uptick. Manufacturing performance is mixed, with two-thirds of the regions reporting little to no change or a decline in manufacturing activity. The energy sector has experienced a slight expansion. Agricultural conditions are relatively stable across multiple regions. The outlook has significantly deteriorated in several regions, driven by increased economic uncertainty, particularly concerning tariffs.

Prices have risen across all regions, with most indicating that businesses anticipate accelerated input cost growth due to tariffs. Many businesses have received notifications from suppliers regarding cost increases. Businesses report they have added tariff surcharges or shortened pricing terms due to trade policy uncertainty. Most businesses expect to pass additional costs to customers. Profit margins are reportedly being squeezed due to rising costs.

Knot: A neutral policy stance is appropriate as shocks continue to unfold

During his Wednesday speech, ECB Governing Council member Knot stated that a rate cut to stimulate the economy is unwarranted, given the uncertain medium-term effects of recent economic shocks. While the pace of disinflation may exceed prior forecasts, he noted that the implications of trade friction and increased European defense and infrastructure spending remain "far from clear." He stated, "This suggests that, overall, a policy rate that is neither accommodative nor restrictive remains viable. In any case, we will maintain a medium-term focus and strive to formulate a policy that sustainably keeps inflation near the 2% target level, with confidence not only at the baseline but also across a range of scenarios."

March U.S. new home sales surge, surpassing forecasts, led by gains in the South

U.S. new home sales experienced a significant increase last month, driven by a slight decrease in mortgage rates and ongoing sales incentives designed to stimulate the spring selling season. Data released Wednesday revealed that new single-family home sales rose by 7.4% to a seasonally adjusted annual rate of 724,000 units in March, primarily fueled by a surge in sales within the South. This performance exceeded the expectations of all economists surveyed. Sales in the South reached their highest pace in nearly four years, building on the modest growth observed in February following adverse weather conditions earlier in the year. Sales also increased in the Midwest, while the West and Northeast regions saw declines.

U.S. tariff revenue surges over 60% in April, reaching at least US$15 billion

According to data released Wednesday by the U.S. Department of the Treasury, U.S. tariff revenue surged over 60% in April, reaching at least US$15 billion, as President Trump's tariff measures took effect. This would establish a new monthly record in dollar terms, based on the aggregated data. The latest figures primarily reflect the tariffs paid by major importers and brokerage firms in April for imported goods that arrived at U.S. ports in March. Approximately two-thirds of importers pay tariffs monthly on the 15th business day of the following month. Treasury data indicates that tariff and other excise tax revenues on specific goods will total at least US$15.4 billion in April.

During his Wednesday speech, European Central Bank Governing Council member Villeroy stated that the impact of U.S. President Trump's tariff actions on Eurozone prices remains uncertain, potentially exerting downward pressure overall.

He further indicated that there are currently no inflationary risks in Europe, and in terms of bringing inflation back to the 2% target, "mission accomplished" is nearly the case, as he mentioned in his speech at the Atlantic Council on Wednesday. "The significant slowdown in wage growth is another piece of evidence," he added.

[Today's Focus]

UTC+8 20:30 U.S. March Durable Goods Orders MoM

UTC+8 21:00 ECB Chief Economist Lane Speaks

UTC+8 22:00 U.S. March Existing Home Sales

UTC+8 23:35 ECB Governing Council Member Rehn Speaks

UTC+8 05:00 Minneapolis Fed President Kashkari Speaks

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Grace Montgomery

Economic

Service prices among businesses in Japan stayed elevated last month, indicating sustained inflationary pressures before the impact from US tariffs kicks in, as the Bank of Japan prepares to set policy next week.

The cost of services among companies climbed 3.1% in March, remaining above 3% for a sixth month, the longest such streak since 1991 if the effects of sales tax hikes are excluded, according to a BOJ report Thursday. The result came in slightly stronger than economists’ estimate of 3%.

For January, the data were revised higher to 3.3%, to reflect the biggest jump in more than 33 years, excluding sales tax hike impacts.

Services related to machinery repair, hotels and transportation were among the biggest contributors to the overall gain as businesses continue to pass on rising labor and energy costs to customers, with overseas tourists helping boost demand for accommodations.

The data underscore the steady inflationary pressure in Japan — at least ahead of the impact from US tariff measures, in a result that by itself would back the case for the BOJ to raise interest rates once economic uncertainty clears. Governor Kazuo Ueda and his fellow board members are widely expected to keep borrowing costs at 0.5% at the conclusion of a policy gathering on May 1.

The tariffs have altered perceptions about the outlook for BOJ policy, with economists projecting a slower pace of hikes leading to a terminal policy rate for this cycle of 1%, down from 1.25% in a survey last month.

Source: Bloomberg Europe

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Michelle Reid

Political

Key points:

● Order seeks to make accrediting organizations more accountable.

● Schools' access to student financial aid could be affected.

● Directive requires universities to disclose source, purpose of foreign gifts.

In his latest step pressuring U.S. universities,President Donald Trumpon Wednesday signed an order intended to toughen standards for college accreditation, a requirement for accessing billions of dollars in federal student financial aid.

The order was one of seven education-related actions taken by the president during an event in the Oval Office. They covered a range of topics including fostering artificial intelligence competency in schools and improving job training for skilled trades.

The administration already has frozen hundreds of millions of dollars in federal funding for numerous universities, pressing the institutions to make policy changes and citing what it says is a failure to fight antisemitism on campus. Harvard University is suing the administration over a funding freeze.

While the federal government does not directly accredit U.S. universities, it has a role in overseeing the mostly private organizations that do so. Accreditation is required for colleges to access federal student loans and grants.

Trump has often complained that accreditors approve institutions that fail to provide quality education, a sentiment echoed in the executive order.

The order directed Education Secretary Linda McMahon to make the accrediting organizations more accountable for schools' "poor performance" and civil rights violations through restrictions on or termination of their accrediting rights, a White House fact sheet said.

Trump ordered McMahon and Attorney General Pam Bondi to investigate and take action against unlawful discrimination by U.S. colleges and graduate schools including law and medical schools.

Another order on Wednesday directed the administration to enforce existing laws requiring universities to disclose when they receive large foreign gifts, amid worries by Trump of foreign influence at universities.

It directed McMahon to take steps to require universities to disclose specific details about foreign funding, including "the true source and purpose of the funds," a White House fact sheet said.

Yet another order sets up an initiative on historically Black colleges and universities aimed at promoting excellence and innovation at the schools.

Under the initiative, an annual White House summit on HBCUs will be staged to "foster collaboration and address key priorities for HBCU success," a White House fact sheet said.

Trump said another order targeted diversity, equity and inclusion policies that impacted how students are disciplined. It said school discipline "should be based on student behavior, rather than racial statistics."

Source: Reuters

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Catherine Richards

Cryptocurrency

The Federal Bureau of Investigation’s Internet Crime Complaint Center (IC3) has released its annual report detailing complaints and losses due to scams and fraud involving cryptocurrency in 2024.

According to the report released on April 23, the IC3 received more than 140,000 complaints referencing cryptocurrency in 2024, resulting in roughly $9.3 billion in losses. The bureau reported that individuals over the age of 60 had been the most affected by crypto-related fraud, with roughly 33,000 complaints and $2.8 billion in losses.

Source: FBI

“Last year saw a new record for losses reported to IC3, totaling a staggering $16.6 billion,” said the report. “Fraud represented the bulk of reported losses in 2024, and ransomware was again the most pervasive threat to critical infrastructure, with complaints rising 9% from 2023," notes the report, adding that, as a group, those over the age of 60 suffered the most losses and submitted the most complaints.

The report added that the resultant losses had increased roughly 66% since 2023, from roughly $5.6 billion to $9.3 billion. The most significant percentage of losses occurred due to crypto investment schemes, while the largest number of complaints related to “sextortion” schemes, in which fraudsters manipulated photos and videos to create explicit content. Other scams included schemes involving the use of crypto ATMs or kiosks.

Related: Crypto scam uses trade war fears to lure victims, Canadian watchdogs warn.

In February, the FBI reported its “Operation Level Up” had saved potential victims of crypto fraud roughly $285 million between January 2024 and January 2025. However, blockchain analytics firm Chainalysis speculated that 2025 could see the largest number of scams to date, given that generative AI is making the practice “more scalable and affordable for bad actors to conduct.”

Globally, Chainalysis estimated that there had been roughly $41 billion in illicit crypto volume in 2024, with roughly 25% of the funds involved with “hacking, extortion, trafficking, or scams.” Some of the most high-profile crimes included the $1.4 billion in crypto stolen from the Bybit exchange in March and North Korean hackers taking more than $1.3 billion.

Trump' s crypto ventures raise conflict of interest, insider trading questions.

Source: COINTELEGRAPH

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Justin

Economic

Gross domestic product (GDP) is expected to have grown at a modest 0.7% (real annualized) in the first quarter, according to the median estimate. If this forecast holds true, the economy would slow sharply after the strong 2.4% growth in the fourth quarter. The Bureau of Economic Analysis will release its preliminary estimate of first-quarter GDP on April 30.

The US economy is expected to see a sharp slowdown in growth in the first quarter.

Today's revised median forecast extends a series of sharply lowered forecasts for the first quarter in recent weeks. In our previous update, dated April 10, the median forecast for the first quarter was 0.8%.

The most worrying aspect of today's first-quarter data is that it does not yet reflect the severe trade disruptions plaguing the United States and the global economy. In other words, the second-quarter data are expected to provide a clearer picture of how tariffs are impacting economic activity.

The International Monetary Fund discussed the outlook on Tuesday, lowering its growth forecasts for the United States and the world, citing tariffs as a factor. IMF Chief Economist Pierre-Olivier Gourinchas wrote yesterday: "Risks to the global economy have increased, and escalating trade tensions could further depress growth."

Kevin Kang, head of global economic research at Vanguard and chief international economist, sees reason to lower the forecast. “We’re going to see significantly weaker economic growth this year,” he told Yahoo Finance yesterday. He added that there’s a lot of uncertainty surrounding the forecast. “The variance around our forecast is unusually large… We’re in what we call a ‘dance with recession.’ So, while recession may not be our baseline, we’re very close to it.”

Source: James Picerno

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Owen Li

Economic

The latest fights now threaten to shake the Pentagon, where Defense Secretary Pete Hegseth has pushed out top aides and faces backlash over sharing secret airstrike details outside secure channels.

APNews mentioned that Hegseth has removed several senior advisers in recent weeks. Last Tuesday, he went on Fox News and blamed those former aides for leaking information and trying to “sabotage the president’s agenda.”

A former Pentagon spokesperson who resigned last week wrote in Politico that Mr. Trump should fire Hegseth for overseeing a “full-blown meltdown.”

This clash has not yet become the main story of Mr. Trump’s return to the White House. However, it shows that the chaos that shaped his first term remains intact.

Mr. Trump often rewards loyalty over experience, setting his team members against each other and using their disagreements as leverage.

The national security team was rattled when Laura Loomer, a far-right activist known for conspiracy theories, visited the Oval Office. Ms. Loomer has accused some officials of disloyalty and persuaded Mr. Trump to fire them.

In an interview released on April 21, she said the White House is far from “one big happy family.” “The advisers don’t get along with each other,” she said. “The heads of agencies don’t get along with each other.”

Trump’s plan to change global trade balances causes conflict among his advisors

Tesla Chief Elon Musk, whose companies could face higher costs, called trade adviser Peter Navarro “dumber than a sack of bricks.” Mr. Navarro shot back, saying that Mr. Musk protects “his own interests” and dismisses Tesla as a “car assembler” who depends on overseas parts.

Navarro is truly a moron. What he says here is demonstrably false.

White House press secretary Karoline Leavitt downplayed these fights. She told reporters there are “far more examples of the president’s team working together enthusiastically and collaboratively.” “The numbers and results of this administration speak for themselves,” she said. “The president and his team are getting work done.”

Mr. Trump has long mixed opposing views to keep people on their toes. He values unpredictability as a tool in negotiations and picks advisers known for aggression and devotion.

John Bolton, who served as national security adviser in Mr. Trump’s first term, said this style shows a lack of experience and inconsistent ideology.

“The only thing they have in common is the belief that they should show personal fealty to Trump,” Mr. Bolton said. “That may keep them in the job, but it undercuts their seriousness.”

Despite the turmoil, Mr. Trump and his allies have closed ranks around Mr. Hegseth

On April 21, Mr. Trump brushed off reports that the secretary joined a second group chat about Yemen airstrikes, calling the stories “fake news.” He told reporters at the White House Easter egg roll that Mr. Hegseth is “doing a great job.” Ms. Leavitt defended him on Fox News, blaming Pentagon staff for resisting “monumental change.”

Yet criticism is rising from inside the department. John Ullyot, the former Pentagon spokesperson, said, “It’s hard to see Defense Secretary Pete Hegseth remaining in his role for much longer.” He said, “Many in the secretary’s own inner circle will applaud quietly” if Mr. Hegseth is fired.

Three other senior aides, Dan Caldwell, Colin Carroll, and Darin Selnick, said they were forced out amid “baseless attacks on our character.”

Trade tensions have also tested the administration’s unity

Mr. Navarro insisted there would be no negotiations on tariffs, but Treasury Secretary Scott Bessent said import taxes would improve the White House’s negotiating hand.

After Mr. Trump partly backed down, Mr. Navarro and Mr. Musk traded more barbs. Ms. Leavitt shrugged at the feud, saying “boys will be boys” and urging critics to remember “the most transparent administration in history.”

Ms. Loomer has kept up the pressure on other officials. Last week, she accused Mr. Bessent of bringing a “Trump hater” into his financial literacy effort. She posted on X that she planned to “personally tell President Trump and personally show him these receipts,” adding “shame on” Mr. Bessent. Mr. Musk shared her post and called the development “troubling.”