Trade war pushes gold price higher

A new chapter in the Trade war puts pressure on the stock markets and helps the gold price go up. This week, U.S. President Trump set his sights on neighboring Mexico by announcing new import tariffs. As of June 10, the U.S. will impose a 5% import duty on all goods from Mexico, a tariff that will then be further increased to a maximum of 25%.

With these import tariffs, Trump is increasing the pressure on Mexico to tackle the flow of illegal migrants. It is yet another example of a political problem that President Trump is trying to solve with economic sanctions. Trump has already imposed sanctions on Russia, Venezuela and Iran for reasons other than economic ones.

Trade war makes investors nervous

The trade war that started between the United States and China now seems to be spreading to other countries. Not only Mexico has to pay the price, European countries also fear import duties. Trump wants to protect his own industry and does so by making products from abroad more expensive.

The danger of a trade war is that a small problem can quickly escalate into a major conflict, resulting in economic damage. An example of this is the Chinese electronics manufacturer Huawei, which no longer has access to certain software from American companies. As a result, the products of this manufacturer become less interesting for consumers in the rest of the world.

Trump's constant threats are also having an impact on financial markets. Globally, stock markets have fallen in recent weeks, with the United States down nearly 1.5% on Friday.

Gold price higher, oil price falling

The threat of an escalating trade conflict also caused the oil price to fall. The price of a barrel of Brent fell by 3.6% to $64.47, while the US WTI fell by 5.5% to $53.50 per barrel.

Meanwhile, the price of gold went up. The precious metal benefited from a flight to safety and rose 1.7% this week to €37,547 per kilo and €1,167.86 per troy ounce. In euros, this is the highest level in more than two months.