Key Takeaways
- Citi (C) has shifted its gold forecast to bullish, raising its three-month target to $3,500 per ounce from $3,300, citing concerns over deteriorating U.S. growth and inflation, exacerbated by new tariffs.
- China has firmly rejected U.S. demands to halt purchases of Russian oil, asserting its energy sovereignty despite threats of up to 100% secondary tariffs from the U.S.
- South Africa is facing significant economic challenges, including potential job losses estimated at up to 100,000, as the U.S. implements a 30% tariff on its exports, effective August 7, 2025.
- German engineering orders declined by 5% year-over-year in June, with both domestic and foreign orders falling by the same margin, primarily due to ongoing trade tensions.
Global trade tensions and economic uncertainties are escalating, prompting significant shifts in market outlooks and national strategies. Citi (C) has revised its gold price forecast upwards, reflecting growing concerns over U.S. economic growth and the inflationary impact of new tariffs. Meanwhile, China is standing firm against U.S. pressure to cease Russian oil imports, emphasizing its energy independence amidst tariff threats. South Africa is grappling with the immediate economic consequences of new U.S. tariffs, which are projected to lead to substantial job losses. Concurrently, Germany's engineering sector is experiencing a downturn in orders, directly linked to the prevailing global trade disputes.
Gold Gains Traction Amid Economic Headwinds
Citi (C) has turned bullish on gold, increasing its three-month price target to $3,500 per ounce from a previous $3,300. This revised outlook is driven by a deteriorated near-term outlook for U.S. growth and inflation concerns, further fueled by recently imposed tariffs. The bank has also expanded gold's expected trading range to $3,300-$3,600 from $3,100-$3,500. Analysts at Citi noted that U.S. growth and tariff-related inflation concerns are expected to remain elevated throughout the second half of 2025, contributing to a moderately higher gold price and new all-time highs.
China Defies U.S. on Russian Oil Imports
China has unequivocally rejected U.S. demands to halt its purchases of Russian oil, asserting its right to ensure energy supply in line with national interests. This stance comes despite threats from the U.S. of imposing secondary tariffs of up to 100% on Chinese goods. Beijing has warned against coercion, stating it will "always ensure its energy supply" and firmly defend its sovereignty, security, and development interests. U.S. Treasury Secretary Scott Bessent acknowledged China's firm position on sovereignty regarding Russian oil purchases but indicated that negotiations would continue, believing there is still a "makings of a deal."
South Africa Braces for Significant Job Losses Due to U.S. Tariffs
South Africa is facing a substantial economic blow as the U.S. implements a 30% tariff on its exports, effective August 7, 2025. This measure is expected to put as many as 100,000 local jobs at risk, particularly in export-linked sectors such as agriculture, automotive manufacturing, metals, and agro-processing. The South African government is developing strategies to mitigate these potential job losses and is finalizing a support package for affected companies. Despite ongoing negotiations and a submitted "Framework Deal" aimed at enhancing trade relations, the U.S. tariffs have been imposed. South Africa's Trade and Industry Minister, Parks Tau, has reaffirmed the country's commitment to continue talks with the U.S. to preserve market access and diversify export markets.
German Engineering Sector Faces Downturn Amid Trade Tensions
German engineering orders experienced a 5% year-over-year decline in June, with both domestic and foreign orders decreasing by the same percentage, according to the VDMA. For the April-to-June quarter, engineering orders were down 2%, primarily attributed to the ongoing tariff dispute between the United States and the European Union. While a 16% surge in demand from euro zone countries provided some offset, this was countered by a 13% fall in orders from outside the currency bloc. The VDMA's chief economist, Johannes Gernandt, noted that it is still difficult to estimate the full impact of the planned 15% tariff on U.S. imports on mechanical engineering.
Pharmaceutical Sector Sees Analyst Upgrade
Bernstein has raised its target price for AstraZeneca (AZN) to 18,000 Pounds from 16,500 Pounds. This indicates a continued positive outlook from the analyst firm on the pharmaceutical giant.
Swiss Sight Deposits Decline
Switzerland's total sight deposits decreased to CHF 468.5 billion on August 1st, down from CHF 474.7 billion previously. Domestic sight deposits also saw a reduction, falling to CHF 439.5 billion from CHF 445.0 billion. This follows a period in July where sight deposits had increased as financial institutions sought to avoid negative interest rates.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.