Review & Outlook
April 2025
Ladies and gentlemen
Unfortunately, the geopolitical chaos in the world has not changed for the better since the beginning of the year. Although a number of attempts have been made to negotiate peace, particularly between the USA and Russia, no consensus has yet been reached among the parties involved. The weak position of Europe, which was not invited to peace negotiations, is particularly noteworthy.
It was only six weeks after the elections in Germany that the CDU/CSU and SPD political parties were able to agree on a coalition agreement, which is not really favourable for the weakening economy. The massive spending on military armaments in Europe that has now been agreed will drive up debt and therefore also interest and inflation rates in the longer term.
The new US President Trump, who was elected in November last year, already warned of the introduction of high import tariffs during the election campaign. The stock markets took this in their stride in the first few weeks of the year, as it was associated with Trump’s typical throat-clearing oratory, which ultimately led to the introduction of a significantly watered-down compromise solution in the past.
However, the announcements from the White House on 2 April shocked investors worldwide. Not only did Trump announce import tariffs for all nations, but he also penalised Europe and China in particular, as well as Switzerland, with significantly higher import tariffs. However, the immediate backlash from the affected countries with the threat of their own import tariffs only led to the USA increasing its tariffs again. China’s attitude of not making any concessions and wanting to fight this trade war to the end has now led to a global escalation. After China responded by increasing tariffs on US goods to China to the same extent, the US reaction was not long in coming and imposed import tariffs of an incredible 104% on China! In reality, this will lead to a complete freeze in trade activities between the USA and China.
We are convinced that, over time, common sense will lead to solutions being found through negotiations between the parties. Until then, uncertainty remains high and it cannot be ruled out that the global economy could fall into recession in the near future.
The US stock markets have been on a downturn since the beginning of the year and the comparatively significant gains on the European markets in the first quarter have now all melted away again since the beginning of April. However, our strong position in precious metals has paid off. Despite some profit-taking in the last few days, the price of gold in Swiss francs has risen by a further 8% since January. All signs point to a further rise in precious metal prices in the medium and longer term.
The current environment advises us to remain extremely cautious in our investment policy. We have confidence in our broadly diversified investments in solid companies and are maintaining our overweighting in precious metals.
We thank you for your trust and wish you many more wonderful spring days despite the geopolitical and economic uncertainties and turbulence on the stock markets.
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