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Gold prices climb on US tariff uncertainty as Wall Street indices slip
Gold prices rose significantly on Monday, driven primarily by escalating uncertainty regarding US trade policy. Additionally, investors sought refuge in the precious metal as a safe-haven asset amidst heightened tensions between the US and Iran, alongside mounting concerns over the Federal Reserve’s future monetary policy in a high-inflation environment.
Gold futures appreciated by 3.31% as markets reacted to President Donald Trump’s decision to implement new tariffs following a Supreme Court ruling that declared previous bilateral levies illegal.
Major US indices fell in tandem as investors weighed the economic impact of the latest trade surcharges and evaluated the potential for AI capabilities to displace traditional services in key industries.
Shares in IBM plummeted 13.15%, serving as a focal point for AI-related fears after the unveiling of a new tool by Anthropic, which threatens to automate core segments of the consulting firm's business.
US tariff uncertainty impels gold prices while stock markets retreat
The gold futures contract (GCJ26) surged by approximately 3.31% to $5,249 per ounce, buoyed by the renewed volatility in US trade policy. This move follows a landmark ruling by the Supreme Court on Friday, which dictated that tariffs unilaterally imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful. In a swift response on Saturday, President Donald Trump announced a temporary 15% tariff on all imports—the maximum threshold permitted under Section 122 of the Trade Act of 1974. Although this surcharge is legally restricted to a 150-day duration without congressional approval, the immediate impact has triggered a flight to quality, with safe-haven assets such as gold attracting significant interest from both hedgers and institutional investors.
Geopolitical factors further supported the rally, as concerns mounted regarding the US-Iran relationship. Despite ongoing negotiations concerning the Iranian nuclear programme, a heightened US naval and military presence in the Middle East has stoked fears of escalation. Additionally, Friday’s economic data—which revealed a lower GDP growth rate and persistent PCE inflation—has reinforced expectations that the Federal Reserve may maintain restrictive interest rates for a prolonged period to dampen inflationary pressures.
In contrast, US equity markets suffered broad-based losses. The S&P 500 index dropped 1.04% to 6,837 points, the Dow Jones Industrial Average decreased by 1.66% to 48,804, and the Nasdaq 100 fell 1.21% to 24,708. Market sentiment was particularly unsettled by a research paper from Citrini Research titled "The 2028 Global Intelligence Crisis". The report, which outlines a scenario where AI-driven automation could lead to a 10.2% unemployment rate, circulated widely across Wall Street trading floors, amplifying fears that the current technological shift may lead to significant structural displacement in the broader economy.
Figure 1. Gold Future Contract GCJ26 (2025–2026). Source: Data from the COMEX Exchange; Figure obtained from TradingView.
IBM shares drop aggressively on Anthropic’s Claude Code capabilities
Shares in International Business Machines (IBM) fell 13.15% to close at $223.35, as investors expressed concern that rapid advancements in generative AI could jeopardise the firm’s lucrative consulting business. The catalyst for the sell-off was the release of "Claude Code" by Anthropic, an AI tool specifically engineered to automate the analysis and modernisation of COBOL systems.
The Common Business-Oriented Language (COBOL) remains the backbone of global business data processing, particularly within banking, insurance, and government sectors. Traditionally, the complex task of modernising these legacy systems has required extensive manual intervention from IBM’s specialist consultants. By offering a tool capable of mapping dependencies and modernising codebases in a fraction of the traditional time, Anthropic has raised existential questions regarding the sustainability of IBM’s high-margin services.
Quarterly financial results
The corporate earnings season continues this week. The following key institutions are scheduled to report, which may contribute to further volatility in the US and the UK equity markets:
Tuesday
- Home Depot Inc. (HD)
Wednesday
- Nvidia Corporation (NVDA)
- HSBC Holdings PLC (HSBA)
Thursday
- Salesforce Inc. (CRM)
- Intuit Inc. (INTU)
- Dell Technologies Inc. (DELL)
- Warner Bros Discovery Inc (WBD)
Key economic events this week
During this week, several key economic indicators will be released. Some of the most important are the following:
Monday
- Germany: Ifo Business Climate
- Mexico: GDP Growth Rate
Tuesday
- US: The Conference Board Consumer Confidence
Wednesday
- US: President Trump State of the Union Speech
- Germany: GfK Consumer Confidence
- Germany: GDP Growth Rate
- European Union: Inflation Rate
- US: EIA Crude Oil Stocks Change
Thursday
- Mexico: Unemployment Rate
- US: Continuing Jobless Claims
- Japan: Industrial Production
- Japan: Retal Sales
Friday
- India: GDP Growth Rate
- Germany: Inflation Rate
- Canada: GDP Growth Rate
- US: Producer Price Index
