Monthly Market Recap: Gold Positioning Pays Off During Trade Turbulence

Donald Trump’s tariffs were rolled out with patriotic fanfare, but most are not celebrating. Markets are falling fast. Investors see these sweeping tariffs not as a moment of strength, but as a signal of escalating risk. Let’s be honest: tariffs are taxes. And this tax—slapped on imports across the board—is a blunt instrument with serious consequences. As much as the rhetoric feels defiant, the economics are shaky. Isolation is not strength. Turning inward while the rest of the world turns against you is not a path to prosperity. Trump’s tariffs aim to rebuild the industrial base—primarily blue-collar, low-to-mid skill manufacturing jobs. But it’s unclear if enough American workers want those jobs, and if they do, whether they’re willing to perform them at a wage that makes economic sense. That reluctance isn’t a failure—it’s generational progress. It reflects a society that has invested in education, moved up the value chain, and aspires to higher standards of living.

The best solution for all participants is no tariffs and free trade. From a game theory perspective, if you are faced with tariffs, the optimal strategy is to retaliate—raising tariffs in response to pressure your trading partner to drop theirs. The goal isn't escalation; it’s mutual de-escalation. In that sense, Trump may be on to something.

Ultimately, this is a giant game of chicken. It’s dangerous—for everyone. While I remain optimistic that the U.S. ultimately comes out ahead on trade, it won’t be without scars. These actions risk undermining America’s trustworthiness as the world’s economic leader. And in a global system, everyone is replaceable. If this drags on, the economic fallout won’t be limited to one nation. It will be global. No one wins a prolonged trade war. Everyone bleeds.

The risk isn’t just inflation—it’s fragmentation. Trade wars make everything more expensive, more uncertain, and more fragile. There’s a reason markets are on edge.

The U.S. dollar, historically a safe haven, has weakened nearly 8% this year. That’s not typical during global stress—and it’s not just a signal of market volatility, it’s a signal of fading trust. This environment pushes the world closer to de-dollarization. As confidence erodes, capital flows increasingly into decentralized assets like gold and Bitcoin—stores of value that don’t rely on any single government’s credibility. Gold is breaking out—up over 16% and trading above $3,100 an ounce—doing exactly what it’s supposed to do: protect against policy missteps, economic instability, and loss of confidence.

Investors face real, structural risks:

• Geopolitical Tensions: War, trade conflict, and sanctions are multiplying.
• Unsustainable Public Debt: Debt is spiraling with no credible plan to repay it.
• Fiscal Irresponsibility: Deficits are growing, and interest costs are ballooning.
• Persistent Inflation + Slowing Growth: A dangerous mix that can choke real returns.

It’s not all gloom and doom; we are in a clear innovation cycle that will eventually drive productivity gains and long-term economic growth. A new wave of technological advancement—led by artificial intelligence—is changing the landscape across industries. Innovation is real, and it is compounding. But let’s not confuse the long term with the short term. We are dangerously close to a recession, and that risk is real. Near-term growth estimates are vulnerable, and the immediate risk is clearly to the downside.

As with every major correction, these periods of stress create opportunity. This time will not be different. But how you go about it makes all the difference.

Stocks

• The S&P 500 Index is down nearly 15% from highs, but stocks are not yet cheap.
• Valuations (P/E ~24 vs. 10-year avg. of 22) remain elevated given recession risk.
• A downturn could reset prices further—real buying opportunities are likely ahead, but they are not here yet.

Bonds

• Yields have fallen fast. The 10-year U.S. Treasury yield has fallen from 4.79% to below 4%—a clear recession signal.
• Credit spreads are widening, a growing risk to fixed income portfolios.
• Stay cautious. Duration and quality matter more than ever.

Real Assets

• Gold is working—expect that to continue.
• Commodities started the year strong, up nearly 10%. However, that strength is fading quickly. Recessions are not good for commodities, and that risk is now being aggressively priced in.
• OPEC+ shocked markets with a massive supply hike to discipline members—and possibly to align with U.S. political pressure.

Bitcoin

• Bitcoin corrected from a near-term overbought situation, pulling back to ~$80K from earlier highs over $107K.
• Unlike traditional assets, Bitcoin is decentralized—uncontrolled by any single government or central bank. It is much more volatile than gold and should not be confused as a risk-off asset. Expect prices to remain under pressure in the near term. However, because of its decentralized store-of-value attributes, Bitcoin is well-positioned to rally hard in the future.

Bottom Line

Having managed money through many corrections, we’ve learned that the strategy for success doesn’t change. (1) Be diversified. (2) Opportunistically purchase good assets with a plan. Our plan is simple: we came into this mess diversified, and we plan to use this volatility to buy quality assets at a discount.

Tariffs aren’t a traditional growth policy, but they can be a strategic one. From a game theory perspective, retaliation may be necessary to encourage all sides to drop barriers and return to free trade. The goal isn’t protectionism—it’s leverage. Used effectively, tariffs can be a means to a better end. But this situation has already escalated. China has responded with retaliatory tariffs at the same levels on all American goods. Others will likely follow. This is no longer a warning shot—it’s a trade war. And trade wars rarely end without economic casualties.

But beneath the noise, the future is still being built. Gold is doing its job. Stocks are repricing. Innovation is real and ongoing. This is a moment for focus, not fear.

Diversify. Accumulate. Position for what’s next.

Happy Liberation Day.

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