Frankfurt’s DAX index opened with a slight downturn Friday morning. Around 9:30 AM local time, the benchmark index was calculated at approximately 24,140 points, 0.2 percent below Thursday’s closing level.
Munich Re experienced significant losses, with shares declining by over seven percent. The reinsurer has recently been facing further price reductions, leading to lower business volume.
Jochen Stanzl, Chief Market Analyst at CMC Markets, noted a degree of uncertainty amongst investors in the Frankfurt Stock Exchange over the past week. “The DAX is currently stagnating, with neither buyers nor sellers gaining a decisive advantage. Following a wave of stop-loss selling a week ago, we saw a short squeeze yesterday – 1,000 points down, 1,000 points up – and now the DAX is back where it started.
While the recent trade agreement between the US and the European Union has offered some clarity, implementation challenges are now emerging. “There’s ambiguity surrounding the cumulative effect of tariffs – will they add up to 27.5 percent on automobiles, or will the 15 percent cap apply? Japan is benefiting from news that different tariffs won’t be added together. Will Japan and the EU be subject to the same rules? The answer remains unclear.
This uncertainty is reflected in the price of gold, which reached a new record high following tariff-related news. It was discovered that 1-kilogram and 100-ounce bars are subject to tariffs, potentially eliminating tariff-free import access to the US – a reversal of the exemption granted in April.
“It’s currently unclear whether this is an error by US authorities or if the tariffs only apply to imports from Switzerland, which has not yet reached a deal with the US. Regardless, a surge in demand from Americans seeking physical gold bars is anticipated, fueled by expectations of rising prices. This increased demand is further pushing the price upwards” Stanzl explained.
The Euro was slightly weaker in early trading, trading at 1.1655 US dollars. Conversely, the US dollar was valued at 0.8580 Euros.
The price of gold saw a slight decrease, trading at 3,396 US dollars per fine troy ounce (-0.1 percent) in the morning, equivalent to 93.68 Euros per gram.
