In April, Trump’s volatile tariff policies and his continued criticism of Powell continued to roil markets, while simultaneously being constrained by U.S. Treasury yields. The U.S. GDP declined by 0.3% in the first quarter, marking its first contraction in three years. Although partially attributable to pre-tariff import rushes, this also signalled economic cooling and deteriorating consumer confidence. U.S. assets experienced widespread selloffs, with the dollar depreciating against most currencies and precious metals. The dollar index consecutively dropped below 100, and Treasury yields surged. Gold, as anticipated, reached new highs after liquidity impact adjustments, touching the $3,500 mark before profit-taking due to rising market risk appetite. Gold producers released first-quarter earnings, with most delivering results exceeding expectations. Nevertheless, they experienced modest monthly gains due to gold price pullbacks and significant market volatility.
Domestically, Chinese policies focused on supporting economic resilience through fiscal and monetary measures, including interest rate cuts and increased bond issuance. In April, exports began to decline, potentially leading to negative growth.
By May, Asian currencies, including the renminbi, appreciated against the dollar, and signals of U.S.-China trade dialogue emerged. Overall, the economic landscape suggested cautious optimism amid ongoing geopolitical and trade uncertainties.