Gold price rally helps rand recover after Trump’s tariff threats

The South African rand found support on Monday from record-breaking gold prices, as investors sought refuge in the safe-haven metal following renewed tariff threats by US President Donald Trump against China. The commodity-linked currency had fallen around 1.70% after Trump's announcement on Friday but attempted to recover some of those losses. By 14h22 GMT, the rand was trading at 17.3425 against the dollar, up roughly 1% from Friday’s close. On the Johannesburg Stock Exchange, the Top-40 index rose by 0.80%, while South Africa’s benchmark 2035 government bond strengthened slightly, with the yield dipping by one basis point to 9.115%.

In the United States, stocks staged a sharp rebound on Monday. The S&P 500 rose by 1.30%, the Nasdaq surged 1.60%, and the Dow Jones climbed more than 450 points, recovering from Friday’s steep losses - the S&P’s largest one-day drop since April. Traders seemed to shrug off renewed tensions in the US–China trade dispute, sparked by Washington’s threat of higher tariffs in response to Beijing’s rare earth export controls. Over the weekend, however, President Trump struck a more conciliatory tone, assuring that the “China situation will all be fine”.

In the United Kingdom, the FTSE 100 ended Monday up 0.20% at 9 443, halting a two-day decline, with gains driven by precious and industrial mining stocks amid rising gold and copper prices. Endeavour Mining jumped 12%, Fresnillo gained 8.80%, while Antofagasta, Anglo American, and Glencore rose by 5.10%, 3.60%, and 3.40% respectively. Lloyds Banking Group added 0.90% after announcing it would allocate an additional £800 million to cover compensation costs linked to the motor finance mis-selling scandal.

Across Europe, markets also advanced, with the Stoxx 50 up 0.50% and the Stoxx 600 gaining 0.30%, buoyed by a recovery in mining shares after Trump’s reassurance on US–China trade relations. The Stoxx 600 Basic Materials Index rose by 2.40%, with Fresnillo up 9.50%, Antofagasta 5.10%, Aurubis 3.70%, and Anglo American more than 3%.

In Asia, Japan’s Nikkei 225 dropped 1.01% to close at 48 089, while the broader Topix index fell 1.85% to 3 198 on Friday. Investor sentiment was weighed down by political uncertainty and recent remarks from the finance minister. The situation intensified after Japan’s Komeito party announced its departure from the ruling coalition led by the Liberal Democratic Party (LDP), casting further doubt on Sanae Takaichi’s policy stance and complicating her path to the premiership.

Chinese markets also extended losses. The Shanghai Composite edged down 0.19% to close at 3 890, while the Shenzhen Component slipped 0.93% to 13 231 on Monday. Sentiment remained cautious after President Trump threatened to impose an additional 100% tariff on Chinese goods, in response to Beijing’s newly introduced export controls on rare earth minerals. China warned it would retaliate if the tariffs were implemented. However, Trump later signalled a willingness to negotiate, ahead of a potential meeting with President Xi Jinping later this month, once again stating that trade relations “will all be fine”.

In commodities, WTI crude oil futures rose by over 2.50%, nearing $60 per barrel, recovering from a five-month low as hopes for a de-escalation in US–China trade tensions lifted market sentiment. Gold prices soared to a record high of $4 090 per ounce, driven by strong safe-haven demand amid ongoing trade uncertainty, broader economic concerns, and expectations of further interest rate cuts in the United States. On Friday, Trump had threatened additional 100% tariffs on Chinese exports, along with new export restrictions on critical US-developed software, set to take effect from 1 November.