Happy Friday, traders. Welcome to our weekly market wrap, where we take a look back at these last few trading days with a focus on the market news, economic data, and headlines that had the most impact on gold prices and other key correlated assets— and may continue to in the future.
Here’s what you need to know:
- Gold fell to a weekly low of $3,260/oz after a court ruled against the Trump Administration’s tariff authority.
- A Federal appeals court later paused that ruling, triggering a rebound in gold prices.
- The US Dollar’s volatile response to legal and policy shifts played a key role in gold’s movement.
- Gold ended the week near $3,300/oz ahead of key June economic data releases.
Similar to last, this holiday-truncated week of gold trading has largely been dictated by investors’ and traders’ reactions to US fiscal policy headlines, with two notable differences: the market-moving headlines this week have almost all been tied to the latest tumult around the high-impact Trump Tariffs, and not so much relating to budget votes and negotiations in Washington; and the reaction in gold prices to tariff news has flowed through the US Dollar’s pricing.
So, What Kind of a Week Has it Been?
Coming out of Monday’s Memorial Day market holiday, Tuesday’s overnight opens cut a deep sell-off into gold spot markets from $3340/oz to roughly $3310. Through Tuesday’s trading and the first half of Wednesday in New York, gold maintained a steady enough level of interest from traders to hold at or just below the $3300 level, but precious few higher bids.
With a mostly quiet macroeconomic data calendar on offer this week, it looked possible that (having moved past an unremarkable release of FOMC meeting minutes) the yellow metal might just linger at that level all week.
Trump Tariffs Drive Market Turbulence
Trading and price volatility in multiple asset classes, including gold, surged on Wednesday afternoon, however, as news broke of the US Court of International Trade announcing a decision that the Trump Administration does not have authority within the US Constitution to enact the majority of tariffs it has announced and/or threatened against trading partners large and small.
One marked impact of this announcement was a climb in the US dollar, slow at first and then sharp, which sent gold spot prices sliding in the other direction. By the US market close on Wednesday evening (also just before the first opening bells for Asia’s Thursday sessions,) the precious metal had fallen to the weekly low at $3260/oz in spot markets, from which it began to rebound with support.
Dollar Volatility and Legal Uncertainty Fuel Rebound
It’s tough to tell just how much of gold’s reclamation of $3300 (just south of it) was due to investors stepping in having felt gold suddenly became “cheap,” because less than 24 hours after the announcement of the trade court’s ruling against the Trump administration, a Federal appeals court “temporarily paused” the ruling and its injunction, presumably pending an elevation of the argument to the US Supreme Court.
Although this didn’t change anything in the immediate sense, the news pushed a dramatic (but proportional) unwind of Wednesday’s trade. The US Dollar stormed the headlines again, and the Greenback’s trade value vs. partners fell, and gold spot prices rebounded as high as $3325/oz midday before moderating and settling back around what’s looking like interchangeable support and resistance at $3300 where it has largely held the line through Friday’s session.
What’s Next for Gold?
The flow of headlines around the US President’s desired trade policy and its potential damages might actually slow in the first trading week of June and the early phase of the summer market doldrums, given the decision now likely moves to the Supreme Court at a date to be determined.
We will have macro data again, finally, to contend with, though, as next week brings some key ISM survey reads and closes with the May jobs report.
In the meantime, traders, I hope you can get out and safely enjoy your weekend for the next couple of days. After that, I’ll see you back here next week for another market recap.
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