Gold prices resumed to record highs for a fourth straight session, underpinned by strong momentum in the markets, as it has risen by 11% in April, heading towards its best monthly gain since January 2012.
Several key factors are driving this unprecedented rise, most notably Trump’s fierce criticism of Fed Chair’s policies, lack of progress in trade talks, new U.S. solar panel tariffs and escalation in US-China trade war.
1: Trump Fed Chair criticism
U.S. President Donald Trump emphasized that the recovery of the U.S. economy relies heavily on lowering interest rates. He stressed the need for further actions in this regard, stating that the economy could face a slowdown if interest rates were not reduced immediately.
Trump reiterated his criticism to Federal Reserve Chairman Jerome Powell, calling him “slow” in making the necessary decisions to support the economy. He also called Powell a “Major Loser” due to his recent decisions on interest rates, which Trump believes are ineffective amid the current situation.
By the same token, the White House Chief Economic Adviser stated on Friday that Trump’s administration is considering the possibility of firing Jerome Powell.
2: Lack of progress in trade talks
The Thailand government announced the postponement of trade talks with the United States regarding the Trump administration’s plans to impose a 36% tariff, after Washington requested that Bangkok address a range of “trade-related issues,” according to official sources.
Thai Prime Minister Prayut Chan-o-cha stated in a press briefing on Tuesday that no new date has been set for the talks, which were originally scheduled for April 23. He noted that both sides had agreed to postpone the meeting but did not disclose the specific concerns raised by the United States.
3: US new solar panel tariffs
United States imposed new tariffs of up to 3,521% on solar panel imports from four Southeast Asian countries. While seen as a win for domestic manufacturers, the move may also worsen existing challenges facing the U.S. renewable energy sector.
Trump announced the new tariffs on Monday after a year-long trade investigation concluded that solar panel manufacturers in Cambodia, Vietnam, Malaysia, and Thailand were benefiting from unfair government subsidies and engaging in “dumping”—selling products in the U.S. at prices below production costs.
The investigation was initiated following a request from U.S. solar panel manufacturers, who urged the government to intervene and protect the domestic industry from what they described as unfair trade practices.
4: Trade war with China
Beijing warned its trade partners against yielding to what it called “U.S. pressure” intended to isolate China, amid the trade tariff war launched by President Donald Trump. It reiterated its strategy of using both incentives and threats to win support from countries caught between the world’s two largest economies.
Chinese warning followed media reports indicating that Washington intended to pressure certain countries to scale back their trade relations with China in exchange for tariff exemptions.
“Appeasement does not bring peace, and compromise does not earn respect,” Chinese Ministry of Commerce spokesperson said on Monday, reflecting his country’s rejection to any deals that may impair its economic interests or global position.