30% Tariffs on South Africa depreciate the Rand...

Trump announces tariffs

US president Donald Trump announced that the US will be imposing 30% reciprocal tariffs on all South African imports on Wednesday, this week. President said these tariffs are because these countries he imposed them on were "treating the US badly". These were calculated by adding all the tariffs that the US was being charged by those countries (all the tariffs) and any non-cash barriers, including currency manipulation, and then divided into half. Consequently, it was determined that South Africa was charging the US 60%, hence he arrived at the 30% tariff.

Impact on SA businesses Despite the US not being South Africa's largest trade partner, exports to the US being 30% more expensive may result in SA losing competitive advantage and already existing importers now moving to countries facing lower tariffs. Consequently, this could result in economic growth in key industries like agriculture, manufacturing and automotive slowing down, potentially leading to rise in unemployment in those sectors. Impact on the Rand

The rand reached a 2-month low as it traded at R19.01 against the dollar after the tariffs were announced.

ArcelorMittal gets rescued

The Industrial Development Corporation's R1.68 billion financial assistance to ArcelorMittal has saved the company from their planned closure of two of their key steel mills which was expected to result in 3 500 jobs getting cut. The company said that this is expected to buy them at least another six months for them to try and get profitable again. The government will also take this opportunity to respond to the challenges that ArcelorMittal has raised over the years, including the influx of cheap metal imports, surging electricity costs, rail services and government regulations that make it hard for them to stay in business. UIF will also give ArcelorMittal another R400 million for them to be able to cover their labour costs whilst IDC advised them to consider offers for their Mills as it goes to conduct a due diligence exercise on its operations. Furthermore, ArcelorMittal has demanded that the government imposes a scrap metal export tax and forced discount on scrap metal, claiming that streel recyclers are having an unfair advantage as they source their production steel directly from iron ore. COINZ NEWS

Gold Analysis: Weekly Chart

Gold closed past the $3,100.00 mark last week, which is very impressive. This week, Gold continued in its bullish sentiment. However, as shown by the candlestick above, there is a major draw back and the bears appear to have finally been taking back the market's control midweek. This could possibly be because of Trump's announcement of global tariffs on countries. But, like I always say, let's scale down to the lower timeframes to further understand this draw back. Daily Chart

The daily chart also shows that Gold is still in a bullish momentum. On Monday, Gold opened bullish, however, the bears controlled the market on Tuesday and Thursday as Gold praises failed to break above the $3,136.090 price level as it proves to be Gold's current strongest rejection level. My own opinion on this is that, in terms of simple price action, Gold is drawing back until at least the previous high level of $3,040.00 to retest and then continue going up. The market might end up closing bearing and bears taking control until next week Wednesday until the market reaches the $3,040.00 price level again and continues back up. However, let's scale down even further to confirm this movement.

4-Hour chart

As mentioned above, the prices are simply retesting and respecting the $3,040.00 as a previous high and the 4-hour chart is proving that to be correct as we can see that prices have already touched the $3,050.00 level and they might go down even further to $3,040.00 to respect that level and go back up again. However, there's a possibility of this being the start of a consolidation of prices between the $3,040.00 and $3,136.090 price range. Anything is possible in the market so there's no certainty. I hope you enjoyed my analysis for this week. Thank you for reading, catch you next week. Don't forget to read, comment, like, share and subscribe!