Gold prices rise and dollar falls amid fresh Trump tariff threat

Global financial markets are grappling with significant uncertainty, triggering a surge in gold prices and a dip in the US dollar, following the US Supreme Court’s decision to strike down Donald Trump’s tariff policy.

The situation was described by one expert as an "unholy mess" after Mr Trump responded by announcing an increase in the global tariff rate to 15 per cent.

Gold, a traditional safe haven asset, saw its price briefly climb to approximately $5,280 (£3,901) per ounce.

By early Monday trading, the commodity had settled 0.7 per cent higher at $5,140 (£3,805) per ounce, indicating investors’ flight to stability amid anticipated volatility.

Meanwhile, the US dollar weakened by about 0.3 per cent against the pound, trading at 0.74, and similarly dipped against the euro to 0.85.

Further signs of market apprehension were evident as US futures for oth the S&P 500 and Dow Jones indexes fell, signalling a likely downturn when Wall Street opens later on Monday.

Investors and businesses around the world will be digesting developments over the weekend regarding Mr Trump’s tariffs agenda.

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The highest US court struck down a significant portion of tariffs in a major ruling on Friday, including the sweeping “reciprocal” tariffs he levied on nearly every other country.

These were imposed under an emergency powers law known as the International Emergency Economic Powers Act (IEEPA).

The US president responded by saying he would be increasing the global tariff rate to 15 per cent, “effective immediately”, hitting back at the Supreme Court’s ruling as an “extraordinarily anti-American decision”.

Mr Trump signed an executive order enabling him to bypass Congress and impose the tax on imports from around the world, but that are limited to 150 days before the administration must seek approval.

Richard Hunter, head of markets at Interactive Investor, said: “Tariff developments have turned the situation into an unholy mess, prompting far more questions than answers.

“After the Supreme Court ruled against the president’s tariffs, the implications are far from clear.

“No reference was apparently made in the ruling as to whether the monies raised from tariffs so far would need to be repaid and, even if this is the case, whether the refunds would go to companies or the ultimate customer who will have suffered higher prices.”

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Some experts have said the US has already collected around 130 billion dollars (£96 billion) in tariffs using IEEPA rules.

Russ Mould, investment director for AJ Bell, said Mr Trump’s latest plan “creates yet another cliff edge and the events of recent days have left global governments scrambling to work out whether the deals they had agreed with the US will be affected, and also whether money collected by the US government will have to be paid back”.

The renewed uncertainty appeared to be weighing on some European markets, with German carmakers BMW and Volkswagen moving lower on Monday, helping bring the Dax index down by about 0.4 per cent.

It was a mixed picture, however, with the UK’s FTSE 100 and France’s Cac 40 more or less flat by mid-morning.