Gold prices fell on Monday as the dollar rose against most major rivals, amid a violent asset selloff worldwide, with the precious metal falling below the $3000 barrier.

China announced that new 34% tariffs on all US imports will go into effect on April 10, in response to Trump's 54% tariff on Chinese products.

US President Donald Trump announced historic tariffs on most world countries last week, starting with a 10% base tariff and more for specific countries.

Following Wall Street's severe decline last week, Trump defended the new tariffs as important medicine to rebalance the economy, adding he's not concerned about the stock losses so far.

Trump threatened China with an additional 50% tariff if they implemented their retaliatory 34% tariffs on US products. 

Otherwise, the dollar index rose 0.3% as of 18:50 GMT to 103.3, with a session-high at 103.5, and a low at 102.1.

On trading, gold spot prices fell 1.6% as of 18:51 GMT to $2985 an ounce. 

US stock indices lost ground on Monday amid a heavy selloff in the global markets due to the trade war.

China announced that new 34% tariffs on all US imports will go into effect on April 10, in response to Trump's 54% tariff on Chinese products.

US President Donald Trump announced historic tariffs on most world countries last week, starting with a 10% base tariff and more for specific countries.

Following Wall Street's severe decline last week, Trump defended the new tariffs as important medicine to rebalance the economy, adding he's not concerned about the stock losses so far.

On trading, Dow Jones fell 1.2% to 37884 points, while S&P 500 tumbled 0.4% to 5058 points as NASDAQ gave up 0.5% to 15665 points.

The eurozone rose in European trade on Monday against a basket of major rivals, resuming gains against the dollar after a short hiatus on Friday and approaching seven-month highs on hopes for increasing spending in the eurozone. 

After the US tariffs on European products, the EU is now preparing a package of emergency measures to boost the most affected sectors of the economy.

Experts expect the tariff war to cause a US recession, which could prompt the Federal Reserve to conduct steeper rate cuts than its European counterpart.

The Price

The EUR/USD price rose 0.55% today to $1.1023, with a session-low at $1.0878.

The pair fell 0.8% on Friday, the first loss in three days on profit-taking away from a seven-month high at $1.1145.

The euro rallied 1.3% last week, the second weekly profit in a row on concerns about a US recession following Trump’s aggressive tariffs.

EU Spending

After the higher than expected 20% US tariff on EU imports, it’s widely expected the EU will take measures to spend more and underpin the economy.

European Commission President Ursula Von Der lyne described the tariffs as a pain hit to the global economy, and asserted the EU will issue countermeasures if negotiations with Washington failed.

US Recession

It’s now increasingly expected by analysts that the US economy will slow down and might even go into recession following the heavy tariffs.

Interest Rates

The Federal Reserve is expected to cut interest rates four times this year, while the European Central Bank is expected to cut rates three times by December. 

The Australian dollar tumbled on Monday against a basket of major rivals, widening losses for the second session against the US dollar and trading below 60 cents, thus plumbing five-year lows.

It comes amid mounting concerns about an aggressive global trade war that could put the world economy into recession, boosting the odds of multiple Australian rate cuts this year.

The Price

The dollar index fell 1.8% today to $0.5933, the lowest since March 2020, with a session-high at $0.6029.

Aussie lost 4.6% on Friday against the greenback, the first loss in four days, and the heftiest since October 2008.

Aussie also lost 3.95% last week, the second weekly loss in three weeks, and the heftiest since March 2020.

The massive losses come as the global markets are shaken by US President Donald Trump’s aggressive tariffs on all imports.

Global Recession

Concerns about a global economic recession are surging, after Trump imposed a 10% base tariffs on all imports, with a higher 20% tariff on the EU, 34% on China, leading to severe disruption in global markets.

Such tariffs directly target vital sectors such as automobiles and industrial products, and will hit global trade considerably, with JPMorgan estimating a 60% chance of a global recession this year.

Oil prices also tumbled to four-year lows, while US stocks lost $5 trillion of their value in just two days, with Chinese demand slowing down and US inflation expected to rise by 0.7%, thus triggering concerns about long-term consequences. 

Australian Rates

The odds of a Reserve Bank of Australia 0.25% interest rate cut in May surged to 90%.

The odds of a bigger 0.5% cut in May stood at 20%.