Global Market Response to Tariffs and Gold Demand
(Reuters) – The Trump administration’s fluctuating approach to tariffs has caused turmoil in global markets, leading investors to seek safe haven assets like gold.
Amidst the ongoing trade war with China and potential U.S. recession, foreign investors are considering reducing their dollar and U.S. debt positions, which are traditional strategies against market unrest.
Gold Holdings
Sustained demand from central banks has provided a solid foundation under gold prices, contributing to this year’s record ascent. Spot gold prices reached a historic high of $3,500.05 per ounce.
Marex analyst Edward Meir notes that due to geopolitical tensions, central banks aim to diversify away from the dollar, with gold being a potential viable asset.
Central Bank Gold Holdings
| Country | December 2024 | January 2025 | February 2025 |
|---|---|---|---|
| United States | 8133.71 | 8131.98 | 8133.75 |
| Germany | 3351.63 | 3351.06 | 3351.79 |
| Italy | 2451.91 | 2451.91 | 2451.94 |
| France | 2437.08 | 2436.48 | 2437.01 |
| Russia | – | – | – |
| China | 2279.13 | 2284.12 | 2289.08 |
| Switzerland | 1039.97 | 1036.79 | 1040.12 |
| India | 876.20 | 878.81 | 879.00 |
| Japan | 846.00 | 846.00 | 846.03 |
| Netherlands | 612.47 | 612.31 | 612.44 |
China’s central bank gold holding as of March 2025 is 2292.38 tonnes.
Source: International Monetary Fund, People’s Bank of China
U.S. Treasuries
In February, the two largest owners of U.S. Treasuries, Japan and China, raised their debt holdings in anticipation of U.S. President Donald Trump’s unpredictable trade policies. Foreign ownership of U.S. Treasuries increased by 3.4% to $8.817 trillion.
Adam Sarhan, CEO of 50 Park Investments, explains that when entities have excess capital, buying Treasury debt becomes an option, but the ongoing trade war could alter these dynamics significantly.
Major Foreign Holdings of U.S. Treasuries
| Country | December 2024 | January 2025 | February 2025 |
|---|---|---|---|
| Japan | 1061.5 | 1079.3 | 1125.9 |
| China, Mainland | 759 | 760.8 | 784.3 |
| United Kingdom | 722.7 | 740.2 | 750.3 |
| Canada | 378.8 | 350.8 | 406.1 |
| France | 332.3 | 335.4 | 354 |
| Switzerland | 298.7 | 301.2 | 290.8 |
| India | 219.1 | 225.7 | 228 |
| Brazil | 201.6 | 199.4 | 207.3 |
| Norway | 157.6 | 173.1 | 161.8 |
| South Korea | 124.9 | 122.2 | 124.6 |
| United Arab Emirates | 77.1 | 92.6 | 119.9 |
| Germany | 97 | 105.5 | 103.8 |
Source: U.S. Department of Treasury
(This story has been refiled to correct the syntax in the first paragraph.)
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