Trump warned of escalating levies on those countries, which are also NATO members, starting at 10 per cent in February and rising to 25 per cent by June. He has also threatened 200 per cent tariffs on French wine and champagne exports to the US.

Gold is seen as a safe haven, especially with concerns over tariff-induced inflation, a slowing US economy, steepening developed market bond yield curves, and a weaker dollar. Gold’s rally to record highs has also been driven by structural demand led by central banks in emerging economies. (See a recent article here about forces driving the metal.)

“Analysts now openly discuss the prospect of $5,000 gold, underscoring how stretched sentiment has become,” David Morrison, senior market analyst at fintech and financial services provider , said the news took Canadian bonds higher to fair value versus US Treasuries. He believes that there is still room to rally but exited his position, moving from double weight to neutral Canada. Should Canadian bonds perform poorly on the current global bond negative moment, they’d be one of his top picks to buy back.

Under the move, China’s president Xi Jinping and Canadian prime minister Mark Carney announced lower tariffs. China is expected to reduce levies on Canadian canola oil from 85 per cent to 15 per cent by 1 March, while Ottawa has agreed to tax Chinese electric vehicle imports at the most-favoured-nation rate of 6.1 per cent. Carney has been trying to diversify trade away from the US, following the uncertainty caused by Trump’s tariffs. The deal could also see more Chinese investments in Canada.