AXMIN Inc (TSXV: AXM)
AXMIN Inc. (TSXV:AXM) is a Canadian-based exploration and development company with a strong focus on central and West Africa.
With the U.S. announcing tariffs on goods from Mexico, Canada, and China, a global trade war has officially begun. This week, the gold market is also feeling pressure from the sharp rise in the U.S. dollar. However, despite some selling pressure, gold’s decline remains smaller than the dollar’s rally, while it continues to outperform the S&P 500 Index, showcasing its consistent resilience in recent years.
April gold futures are attempting to hold their initial support level, currently trading at $2,808.90 per ounce, down 0.92%. Meanwhile, the U.S. Dollar Index has risen significantly, up 1.27% to above 109 points. Additionally, S&P 500 futures are down 113 points to 5,956 points, a drop of 1.87%.
Despite the selling pressure, some analysts believe that gold remains a highly attractive safe-haven asset as U.S. President Donald Trump’s tariff policies have unsettled investors.
The latest reports indicate that the United States has imposed a 25% tariff on imports from Mexico and Canada, along with a 10% tariff on goods from China. These actions have triggered a wave of retaliatory measures. The Canadian government announced that it would impose a 25% tariff on $30 billion worth of U.S. products starting Tuesday, with plans to increase the scale of tariffs to $125 billion within three weeks. Meanwhile, Mexico is expected to release its list of tariffs on Monday. Although China has not yet retaliated immediately, it has announced its intention to take its case to the World Trade Organization (WTO).
Last month, the release of an artificial intelligence (AI) model by Chinese startup DeepSeek caused significant disruption in financial markets, particularly among U.S. tech stocks. During that period, gold prices were also affected, but their decline was smaller compared to the S&P 500 and Nasdaq indices. This episode highlighted gold’s resilience as a safe-haven asset. At that time, some analysts identified the short-term softness in gold prices as a buying opportunity, a judgment that proved accurate in hindsight.
Commodity analysts point out that the gold market may face short-term volatility as its role as a safe-haven asset competes with its negative correlation with the U.S. dollar and rising interest rates. Additionally, analysts note that gold’s appeal as a global alternative currency has increased as the United States weaponizes its economy to support domestic manufacturing.
Economists have warned that increasing tariffs on imported goods will accelerate inflation, forcing the Federal Reserve to end its current cycle of monetary easing sooner than expected.
Paul Ashworth, Chief North America Economist at Capital Economics, said in a report on Saturday that inflation caused by tariffs and other measures will rise sharply and rapidly, eliminating the possibility of the Federal Reserve cutting rates over the next 12 to 18 months. Fixed-income analysts from TD Securities expressed similar views, noting substantial uncertainty about the economic impact of tariffs. As a result, they predict that the Federal Reserve is unlikely to adjust interest rates in the first half of the year, maintaining its current restrictive policy stance and postponing planned rate cuts if necessary.
Analysts warn that if the trade war persists for an extended period, Canada could be at significant risk of a recession.
George Milling-Stanley, Chief Gold Strategist at State Street Global Advisors, stated that gold is expected to continue performing well as investors use it to hedge against inflation risks. He added that the Federal Reserve is unlikely to successfully control inflation, which will ultimately weaken the U.S. dollar. Furthermore, Milling-Stanley noted that the trade war could drive central banks to increase their gold reserves and diversify their holdings away from the U.S. dollar. This is particularly true for emerging markets, which aim to mitigate U.S.-induced economic shocks through greater reserve diversification.
