U.S. stocks fall triple digits Monday, DOW dropped more than 700 points with trade tensions high between U.S. and China. The market dropped an average of 3% across the market, its lowest since March.
President Trump was set to meet with China to make a deal on taxing an additional 15% on all imports to the U.S. while China fired back with an additional $60 billion on U.S. imports, set to start June 1st. On Friday, Chinese Vice Premier Liu said trade talks between China and the U.S Opens a New Window, which lasted for just two hours, “went fairly well” and that “talks would continue.” This as the U.S. increased tariffs on $200 billion of Chinese exports to 25% from 10% that same day.
“The U.S. sharply hiking tariffs on Chinese imports and China threatening to retaliate has thrown into doubt the possibility of the two sides reaching a deal after almost a year of talks,” Jasper Lawler of LCG said in commentary as reported by the Associated Press.
All this tariff talk and pushback from either side is wreaking havoc on the global markets. Some investors and experts think that this may cause the deal to not happen at all. This would be detrimental as China said they would stop buying from the U.S. if the tariff tax hike happens.
Oil prices surged as Saudi Arabia said two of their oil tankers were sabotaged near the coast of the United Arab Emirates. There were no spills and no casualties and still unsure as to who or why has raised some concerns for the security of the oil industry.
While the tariff deal may have been an attempt to help strengthen the U.S. economy, it seems to be causing many problems not only in the moment but long term. The U.S. would lose a significant amount of money if China stops importing from the U.S. Until an agreement is reached, and a deal is set, investors will continue to sell off stocks.
This has caused the price of gold to take off, up $12.26 which puts gold over $1,300 since Sunday night. Many investors are scared and are falling on gold as protection. Having a tangible asset rather than weighted 100% in digital currency gives some relief to investors’ portfolios. People are turning to physical gold and hunkering down for the worst, which for now we aren’t sure how bad it may be and for how long.
Now is the time to make a move, if gold prices continue to rise the way they are, by the end of the week it may be pushing close to $1360 per ounce. Don’t wait until the price climbs more, get protected now while the price is lower.