Gold prices fell to more than a one-week low on Thursday after a U.S. federal court blocked President Donald Trump’s “Liberation Day” tariffs, which impacted the metal’s safe-haven appeal amid a robust dollar.
In Dubai, gold rates dipped, with 24-carat gold losing AED3.5 to AED394.5 and 22-carat gold falling AED3.25 to AED365.25. Additionally, 21-carat gold declined AED3.5 to AED350, while 18-carat gold fell AED2.75 to AED300.25.
Globally, spot gold declined 0.72 percent to $3,274.36 at 4:07 GMT, after hitting its lowest since May 20. Meanwhile, U.S. gold futures lost 0.75 percent to $3,297.55.
The U.S. dollar has gained over 0.4 percent to 100.28, making gold prices more expensive for holders of other currencies.
U.S. trade court blocks Trump’s tariffs
Gold prices dipped after a U.S. trade court on Wednesday halted the enforcement of Trump’s tariffs, ruling that the president overstepped his authority by imposing universal duties on imports from nations with a trade surplus with the United States. Trump had levied “reciprocal tariffs” on multiple countries on April 2, sparking fears of a global recession. However, many of those country-specific tariffs were paused a week later.
“Gold has settled into a relatively narrow, but downward-trending range as it consolidates after several months of strong performance. This rally peaked last month when the yellow metal reached an all-time high of $3,500, before undergoing a sharp correction. The downturn followed President Trump’s decision to roll back some of the aggressive tariffs that had initially triggered market volatility—an apparent attempt to reduce uncertainty amid signs of economic strain,” stated Ole Hansen, head of commodity strategy, Saxo Bank.
Following the trade court’s ruling, the U.S. dollar index surged, making gold prices more expensive for other currency holders. Wall Street futures and Asian equities also climbed. The Trump administration filed a notice of appeal, challenging the court’s authority and signalling a potential escalation to the Supreme Court if necessary.
“Currently, gold is lacking a clear directional trend, primarily due to conflicting macroeconomic signals and investor hesitation. Markets are waiting to assess the full economic impact of Trump’s shifting trade policies. Most analysts expect the broader effects to be negative, which could prove supportive for gold, particularly under the looming risk of stagflation—a scenario characterized by slowing growth combined with rising inflation,” Hansen added.
Economic concerns persist as market awaits U.S. GDP data
Elsewhere, minutes from the U.S. Federal Reserve’s May 6-7 meeting showed that officials are concerned about the potential for concurrent rises in inflation and unemployment. This scenario would necessitate a choice between implementing a tighter monetary policy to combat inflation or lowering interest rates to support economic growth and employment.
Lower interest rates boost the appeal of non-yielding assets like gold, further supporting their prices.
Investors now await U.S. GDP data due later in the day and core U.S. Personal Consumption Expenditures data for further insights into the Fed’s rate cut trajectory.
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Other precious metals
As gold prices declined, the precious metals markets saw upward movement. Spot silver rose 0.53 percent to $33.17 an ounce, platinum gained 0.20 percent to $1,077.16, and palladium edged up 1.14 percent to $973.20.
