Gold Prices Expected to Reach $4,000 Amid Escalating Trade War, Says Analyst
Investing.com – Financial Markets Worldwide
Gold prices may hit $4,000 per ounce soon. A trade war grows between the United States and key partners. This clash stokes market shifts and price rises. Ed Yardeni, a well-known market watcher, shared his views after the U.S. set new tax rules.
New Tariff Measures Announced
On April 3, 2025, President Donald Trump signed a rule. The rule sets a 10% tax on all goods from U.S. partners. This rule takes effect on April 5. The order also calls for similar taxes on 60 countries with high non-tax limits. These start on April 9. Trump said these taxes lessen other costs that the U.S. faces from non-tax limits and currency issues. The U.S. keeps a 25% tax on cars, steel, and aluminum. This step adds more strain to the economy.
Impact on the Economy
Banks like JPMorgan, Bank of America, and Citigroup worry. They see that these new tax rules may push up prices in the U.S. Rising costs for goods may slow how much people buy and lower take-home pay.
For example, the 25% tax on cars and parts may raise the price of new and used cars. Insurance and repair costs may rise along with them. This pressure on prices may remind us of past economic strains. It could also challenge the actions of the Federal Reserve.
The tax plan may bring in about $300 billion each year. That sum might grow to $600 billion if the average tax nears 20%.
Market Reactions
Global markets have felt the weight of these new rules. The S&P 500 fell by up to 4.5%, and the Nasdaq 100 dropped about 5%. Gold prices dipped 1.2% after hitting recent high marks.
Yardeni noted the mood in the market. He said that if Trump keeps his firm tax steps, gold may hit $4,000 by year’s end or even before.
"These taxes push buyers toward gold as a safe place," Yardeni said.
Conclusion
As the U.S. moves ahead with its tax plan, experts will watch price shifts closely. A rise in gold could change things for buyers and the broader economy. Investors should keep up with the latest shifts and watch for changes in money rules that may affect markets soon.
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