Donald Trump said his second term in office would augur a “golden age” for America. For the more literal among us, the Republican president was prescient in this regard. Gold prices passed an eye-watering $3,000 an ounce on Friday, the first time that’s ever happened. For the gold bugs out there, this was a banner event—perhaps even a moment of vindication. But then again, all that glitters is not—well, you know. 

The reason for the increased demand is a central bank buying spree, worldwide economic fragility and of course Trump’s attempts to rewrite the rules of global trade by imposing tariffs on allies and rivals—and their growing appetite for retaliation.

Gold is a centuries-old store of value in turbulent times and the ultimate gauge of market fear. The foundations for the rally were partly set by global central banks’ wariness of relying heavily on the US dollar, also a reflection of geopolitical uncertainty. But in spite of its rally, gold is still a long way from its all-time inflation-adjusted peak, which was set in 1980 and equates to about $3,800 an ounce.

Back then, it was a combination of weak economic growth, runaway inflation and growing geopolitical frictions that sent prices soaring. Some analysts believe similar forces will keep gold moving further into uncharted territory in 2025. —David E. Rovella

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Less sparkly than gold’s ascent however is the state of US consumer sentiment. It fell to 57.9, its lowest level since November 2022 and a steep drop from just a month ago. Making matters worse, long-term inflation expectations among Americans jumped by the most in 32 years. The reason? Trump’s tariff war. “Many consumers cited the high level of uncertainty around policy and other economic factors; frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences,” Joanne Hsu, director of the University of Michigan survey, said in a statement. Forty-eight percent of survey respondents spontaneously mentioned tariffs during interviews.

After a terrible day, even a just-ok day can seem like heaven. That was the case on Wall Street Friday as bloodied investors bought the Grand Canyon-sized dip carved out by Trump’s trade war. Following a selloff yesterday that culminated in a 10% plunge of the S&P 500 from its peak, today it climbed 2.1%, pouring some water on the smoking wreckage of a week marked by on-and-off-again tariff threats, recession calls, geopolitical instability and fear of a shutdown of the US government. Of note were surging yields on German bonds as government leaders agreed on a massive defense spending package, part of a broader move by Europe to prepare for any Russian aggression as America moves away from its old allies.

Mark Carney was sworn in as Canada’s 24th prime minister, bringing the former central banker to power in the middle of an explosive trade war with the US. The 59-year-old took the oath as Canada’s new leader at a ceremony in Ottawa on Friday, five days after Liberal Party members voted overwhelmingly for him to replace Justin Trudeau as head of the party. In his first news conference as prime minister, Carney told reporters there has been “progress” in discussions with the US, after weeks of tariff hostilities. 

Argentina inflation picked up in February despite of President Javier Milei’s move to slow down the peso’s monthly depreciation. Consumer prices rose 2.4% from January, more than the median estimate of analysts surveyed by Bloomberg. On Feb. 1, the central bank slowed down the currency’s monthly slide to 1% from 2%, a move meant to cool domestic prices that have been rising between 2% and 3% per month since October. The slowdown chips away at the currency’s competitiveness abroad and widens the country’s trade balance, which has in the past resulted in devaluations. 

China is said to be considering slashing pay of fund managers who underperform their benchmarks, part of a broad overhaul of the nation’s 33 trillion yuan ($4.6 trillion) mutual fund industry. The China Securities Regulatory Commission is proposing a 50% pay reduction for fund managers if products overseen by them record a loss or return 10% less than their performance benchmarks. The sweeping measures are part of China’s broader struggle to right its economic ship. Policymakers are seeking to attract more long-term capital into the nation’s stock market amid slowing economic growth and the US trade war.

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