Stocks hit and gold rallies on Trump-Europe fallout
|The new front in the tariff wars caught stock markets on the hop, while boosting gold prices, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.
Trump-EU spat casts pall over European trading
The most compelling market selloffs always come from the unexpected. Few investors would have had ‘Trump demands Greenland in lieu of a Nobel’ on their list for 2026 predictions, but here we are. The move to new tariffs came out of nowhere over the weekend, and has duly delivered a modest selloff in global stock markets. The move was exacerbated by the quiet trading prevailing on a US holiday. But looking at things in context, this barely registers yet as a market event. While the VIX hit a seven-week high, it remains well off the November highs.
Gold at new record
At the moment, the reaction to any market event appears to be ‘buy gold and silver’. Today is no different. The longer this momentum-driven trade goes on, the greater the probability that the correction, if and when it comes, will be brutal. But in the same vein, it is futile to stand in front of an oncoming trade. Further trade escalation could see today’s highs taken out in the same way as so many others of late.
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