Gold Joins the Stock Market Selloff
Last week, bullion diverged from equities as gold recorded its fourth consecutive weekly gain, driven by escalating tariff concerns. This week’s economic calendar was packed with Federal Reserve speaking engagements and key U.S. data releases, but investor attention remained firmly fixed on tariff developments out of Washington.
U.S. stocks saw heightened volatility on Monday as markets braced for President Trump’s upcoming “Liberation Day” tariff announcement, scheduled for Wednesday. The S&P 500, which was down as much as 1.6% earlier in the session, rebounded to close the day up 0.6%. Despite the recovery, the index ended the first quarter with a 4.6% loss—its worst quarterly performance since 2022. Meanwhile, safe-haven gold surged 1% on Monday, hitting a new all-time high of $3,145.
On Tuesday, the U.S. ISM Manufacturing PMI fell to 49%, signaling contraction in the sector. Stocks initially declined on the downbeat data but ended the session mixed. Silver held steady near $34.30, while gold eased by 0.8% as traders took profits.
On Wednesday, President Trump announced sweeping tariffs on goods from dozens of countries, including a baseline 10% tariff on most U.S. imports. In addition, he proposed steeper tariffs on select trading partners—34% on China, 24% on Japan, and 20% on the European Union.
U.S. equities plunged following the announcement. The S&P 500 sank nearly 5%, marking its steepest single-day drop in five years. The Nasdaq Composite fell 6%, and the Dow Jones Industrial Average lost 4%. Gold once again diverged from stocks, rising on safe-haven demand. By the end of Wednesday’s selloff, gold had climbed 0.6% to another record high of $3,148, while silver held steady around $34.30 an ounce.
The selloff deepened on Thursday, as fears of a broad trade war fueling a potential recession gripped investors. Gold joined the downturn, falling below $3,100 with a 1.5% daily drop. Silver posted an even steeper decline, tumbling over 5% to close near $31.40.
The tariff-driven market rout continued into Friday, with the Dow plunging 2,200 points. The S&P 500 slid a further 6%, falling deeper into correction territory. For the week, the Nasdaq led losses with an 8.54% drop, followed by the S&P 500 at 8.21% and the Dow at 7.42%.
Gold’s selloff intensified as investors liquidated positions to cover broader market losses. The metal dropped more than 3% on the day, ending the week down 2.7% at $3,037. Silver, as is often the case, experienced a more pronounced move, falling 13.8% for the week to close at $29.59.