00:00Well, let's pick up some of those points with Victoria Scholar, the head of investment at Interactive Investor.
00:05Victoria, welcome back. Good to see you.
00:07I mean, it had seemed, though, investors were getting used to President Trump's tariff threats
00:12and all the market reaction to them was becoming a bit more muted.
00:16But Friday's post lopped $2 trillion off U.S. markets. Why and what's changed?
00:24Well, I think they are getting used to Trump's tariff threats.
00:27I mean, just look at the size of the Liberation Day sell-off versus what we're seeing today.
00:32Yes, markets sold off on Friday with tech bearing the brunt of the declines.
00:36But price action today has turned a lot more positive.
00:39European markets closing higher and the U.S. markets rebounding, too, on those Trump comments.
00:45I think Trump has been trying to ease concerns about those U.S.-China trade tensions.
00:50And it's really that classic taco trade. You know, Trump always chickens out.
00:54He's posting saying there's nothing to worry about with China. It's all going to be fine.
00:59So that's sort of a buy-the-dip signal to investors, suggesting he's not actually going to follow through with that 100% tariff threat.
01:06But as we know, the White House is extremely unpredictable and that causes ripple effects across markets.
01:12As you say, I mean, this is all uncertainty that drives investors' concerns and drives some of them to gold.
01:21Is that a trend that you see continuing or will markets adapt to all of the back and forth and simply get used to the risk?
01:31Yeah, I mean, we've seen that precious metals continue to scale fresh highs, gold up another 2% today.
01:38Like you said, pushing above that 4,000 level on Friday, its eighth weekly gain, silver up even more, up over 6%.
01:47So there's a big kind of broad-based rally across the precious metals.
01:51And it's really that flight to safety trade that continues to propel precious metals higher because of Trump's unpredictability with this threat of tariffs.
02:01But there's also the weakness in the U.S. dollar that has underpinned gains for the precious metals, too, as well as the potential for further Fed rate cuts and central bank buying.
02:11So there's a lot of reasons why gold and silver have been going up.
02:15There's also the U.S. government shutdown as well that provides further uncertainty.
02:19So to think that gold wouldn't have further to run from here, you'd have to be quite bullish.
02:25There's a lot of reasons to be bearish at the moment.
02:28And that's why we're seeing that investors are keeping at least part of their wealth and they're pinning hopes on further gains for gold and silver.
02:37Well, let's talk about Bitcoin then, because it's often been called digital gold.
02:43Tariff tremors have sent gold to new highs, as we've been saying.
02:48Bitcoin has plunged.
02:49Why do you think that is?
02:52Well, we saw that there was that big sell-off in the cryptocurrencies on Friday, caught up in the selling that we saw for the Nasdaq,
03:00the Bitcoin falling as much as 10% over five days last week.
03:05But remember, it hit record highs at the beginning of last week, climbing above $125,000.
03:11So valuations were very stretched.
03:13And now we've seen this pullback.
03:15So quite big movements, quite a lot of volatility there.
03:20So for those that argue that Bitcoin is a gold replacement or a substitute as digital gold,
03:24that theory doesn't really seem to be panning out.
03:27It seems to be acting more as a risk asset correlated more closely with some of the riskier parts of the equity markets,
03:35like tech stocks.
03:37So we've seen that when equities sell-off, Bitcoin tends to sell-off too.
03:41Victoria, good to see you.
03:42Thanks so much for coming back on the programme.
03:44Victoria Scholar, Head of Investment at Interactive Investor.
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