Trump’s aggressive tariffs — including a stunning 104% duty on Chinese goods — have triggered market dislocation. But what’s more alarming is the erosion of faith in traditional safe havens. Familiar sanctuaries are no longer safe.
1. Dollar Dethroned
Once the king of currencies, the USD has lost its shine:
Down 5% YTD, despite rising yields.
State Street’s Michael Metcalfe: “A currency not supported by yields is no safe haven.”
2. Bond Market Breakdown
U.S. Treasuries are under siege:
10Y yields up 40bps this week, 30Y up nearly 50bps, biggest weekly jump since early 1980s.
.MOVE index hits late-2023 highs.
Investors fear forced selling or fading confidence in U.S. fiscal credibility.
Global spillover: UK 30Y gilt yields hit 1998 highs.
3. Gold’s Golden Comeback
Gold surges to record highs > $3,000/oz, up nearly 100% in 2.5 years.
Brief dip last week reversed with 2% gain on Wednesday, just shy of $3,167 peak.
Central banks and investors buy for systemic protection, not just inflation hedging.
4. Yen & Franc Regain Appeal
JPY rallies 7.5% YTD, best day since Sept.
CHF mirrors gains, as safe-haven flows abandon U.S. assets.
5. Defensive Stocks Steady
Rotation to healthcare, utilities, staples.
Since Trump’s win, defensives have outperformed cyclicals, reflecting rising caution.
Conclusion:
This isn’t just volatility — it’s a reordering of global financial trust. The dollar and Treasuries are no longer untouchable. Gold, the yen, and defensive plays lead the new wave of safety.
A new era of risk is dawning — and it starts with shaken confidence.
