Metals Market Report Archive
Metals Market Report 04-11-2025

The Mike Fuljenz Metals Market Report

April 2025 - Week 2 Edition

Gold Soars $200, As Trump Reverses Course on Rapid Tariff Increases

Gold rose $100 in one day, Wednesday, April 9 – one week after the shocking Rose Garden “Liberation Day” tariff warnings – and then gold rose another $100 on Thursday for a gain of over $200 (+7%) since its Monday lows, regaining its previous all-time high, set on April 2nd.

Stocks also soared on Wednesday but stocks retreated on Thursday. Bond prices collapsed on Wednesday as interest rates rose on 30-year Treasury rates, the basis for home mortgages and on the benchmark 10-year rate, as traders sold Treasury bonds to buy gold and stocks after President Trump said he would give most nations 90 days to negotiate lower tariffs with us.

China was the lone nation being punished. President Trump hit the communist nation with impossibly high tariffs, 125% for most items, because of its multiple methods of cheating in trade through currency manipulation, product piracy, counterfeit products, slave labor, high tariffs, illegal drug smuggling and more.

As a result of the President’s more selective tariff policy now, the Dow soared almost 3,000 points, NASDAQ rose over 10%. Plus, the June gold futures contract rose over $200 (+7.3%) from a low of $2,950 on Monday, April 7th, to $3,165 on Thursday morning at 11 am EST.

Before Wednesday’s all-around recovery day, gold had held its own while stocks lost up to 20%, as did most commodities. That means gold was the strongest investment over the past week, just by losing the least, at first. For instance, here’s a table of where most investments were just before the Rose Garden press conference on “Liberation Day,” April 2nd and where they bottomed out this week:

Most commodities are still down over 10% but gold is slightly up in the past week. At their lowest, crude oil was down 23% and copper was down 18%, but gold bottomed out with only a 6% drop. Beyond their recent decline, stocks had already been in a major decline for six weeks prior to Trump’s tariff announcements, having peaked on February 19th. Gold just kept rising each month, so that 100 days into the year, gold is up 20% vs. a 10% decline in the S&P 500.

The U.S. Dollar Index (DXY) is down nearly 8% in three months (at 101.40 today, after peaking at 110.2 on January 13th, a week before President Trump was inaugurated). We noted and agreed with Bank of America in January that the U.S. Dollar was overvalued by 20% and a drop would boost the price of gold.

The March Consumer Price Index (CPI) Reveals No Serious Inflation, Yet

The Consumer Price Index for March was announced early on Thursday and it surprised most pundits by coming in fairly mild, with the overall CPI falling 0.1% (month-over-month), mostly due to falling gasoline prices. This followed a +0.2% rise in February. Before the announcement, not one of the 67 forecasters in Bloomberg’s survey had predicted a drop. Over the past 12 months, the “all items” CPI index has now increased by 2.4% before any seasonal adjustments.

Subtracting energy (which fell) and food (which rose), the “core” CPI rose 0.1% in March, and “core” inflation is up 2.8% over the last 12 months, which is well above the Fed’s 2% target but it is the lowest 12-month increase since Biden’s early days in office, back in March of 2021.

We have to remember that the CRB Commodity index was up sharply in the first quarter, up 8%, from 353 to 381, but the bottom fell out from under commodity prices (plus stocks) on April 2nd, so we will likely see a large drop in the April Producer Price Index for April, unless we see a rapid recovery in the whole array of commodities over the next three weeks.  The CRB Index fell 11% in the four trading days after April 2nd, which wiped out more than its entire gain in the first quarter. That is a lot of ground to recover, as demonstrated in the large recent declines in copper (-23%) and crude oil (-18%) in the last week, following the President’s tariff threats on April 2.

The key takeaway for investors, as demonstrated in the recent short but sharp 6% drop then rise in gold, is to BUY on DIPS. You will be rewarded, not always this rapidly, but it is the best way to buy. The same is true for popular and better-date rare gold coins.

Gold returned to its record high above $3,160 on Thursday morning in the spot market and above $3,170 in the futures market on Thursday, April 10, after dropping 6% between April 2 and April 7.  From a low of $2,950 on Monday, gold rose $100 by the close on Wednesday, April 9 and another $110 on Thursday’s open, while the Dow and S&P are 12% or more below their respective peaks, gold has returned to its record high.

 

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