Gold ETFs GLD, GDX Shine Brighter as New Trump Tirade Spooks Investors

The reawakening of tariff fears has given new energy to gold-linked ETFs such as the VanEck Gold Miners ETF (GDX)and SPDR GoldShares ETF (GLD).

The gold price was up in early trading to $ 3,345, edging closer to the record high reached in April of $3,425.30.

Tariffs are Back

The reason was the return of that market bogey word – tariffs. After a period of weeks when it seemed President Trump’s strategy had been becalmed due to pauses, trade deals and reductions in rates with arch rival China, the threat to the global economy reappeared today.

That was due to Trump threatening a 25% tariff on Apple (AAPL) iPhones sold in the U.S. but not made in the U.S. and the threat to impose hefty 50% tariffs on imports from the European Union starting on June 1.

The passing of a tax bill in the House of Representatives, which is expected to increase U.S. budget deficits and debt, also spooked the markets. His action on the enrollment of international students at Harvard has also been closely studied by investors.

The result was a return of nervous types to the safe haven precious metal and a boost to those ETFs.

ETF Bounce

The GDX was up 2.35% in early trading and the GLD was 1.9% higher. So far this year GDX is 45% better off and GLD is 26% stronger.

“Gold is heading for its best week in a month on heightened U.S. fiscal debt concerns following a jump in U.S. long-end yields in response to Trump’s tax bill, which will swell an already elevated U.S. debt pile,” Saxo Bank noted.

“Trump has been on a tear over the last 24 hours, threatening 50% tariffs on the EU as of June 1, targeting Apple and hammering Harvard, which has put stocks in a black mood, which is great for gold,” said Tai Wong, an independent metals trader.

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