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Shares of gold mining stocks Barrick Gold (NYSE: GOLD), Newmont Mining (NYSE: NEM), Gold Fields (NYSE: GFI), and AngloGold Ashanti (NYSE: AU) were all down today, falling 4.6%, 2.6%, 6%, and 5.1%, respectively.
The declines were all the more notable as the broader market indexes were up strongly on the day. Yet the move wasn't surprising, as the price of gold fell 3.4% today.
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Gold has generally been moving higher in recent months, and generally in the opposite direction of markets, due to the instability caused by the Trump administration's tariff policies. As angst over worst-case scenarios were partially soothed today due to President Trump appearing to walk back from the administration's maximalist positions last night, markets rallied and gold fell.
Gold has surged 42% over the past year
Gold is often thought of as a "safe haven" asset, or the ultimate hedge against geopolitical catastrophe and perhaps runaway inflation in developed countries. Since President Trump took office, the price of the metal has rallied, as various policy positions and statements from the administration have increased global uncertainty, causing the value of the dollar to fall against other currencies. Gold is priced in dollars, so when the dollar declines, perhaps due to investors pulling away from dollar-denominated assets, gold generally rises.
On "Liberation Day" on April 2, President Trump unveiled higher-than-expected tariffs on many countries, friend and foe alike. Since then, the rhetoric between the U.S. and China has escalated, leaving investors fearing a trade war, skyrocketing prices, and global instability. In addition, President Trump's Truth Social posts criticizing Federal Reserve Chair Jay Powell on Monday also increased fears over the Federal Reserve's independence from politics, which added to the uncertainty over the stability of U.S. dollar assets.
However, the past two days have seen the administration pull back from its positions, at least somewhat. Last night, President Trump declared he had "no intention" of firing Jay Powell. Moreover, Trump also said in the same press conference he believes the current 145% tariffs on China "won't be that high" going forward, adding, "It will come down substantially. But it won't be zero. It used to be zero."
The 145% tariffs on goods from China threatened an economic downturn this year, given that China is the U.S.' third-largest trading partner, the largest outside of neighbors Canada and Mexico, and a key supplier of electronics and other crucial items needed by American consumers and businesses. Moreover, the somewhat reckless and haphazard manner in which the administration rolled out tariffs has called into question the "safe haven" status of U.S. Treasury bonds, which paradoxically saw their yields rise even as the markets fell. Usually, Treasury yields and U.S. stocks move in a similar direction.