Happy Friday, traders! It’s that time again—our weekly market wrap where we dissect the week’s events that influenced gold prices and other correlated assets, providing you with insights that you won’t find elsewhere.
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Gold dipped to a weekly low of $3,260/oz after a court ruled against the Trump Administration’s authority on tariffs. This moment encapsulates the ongoing uncertainty in the market and highlights the complex interdependencies between legal rulings and commodity prices.
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A subsequent pause in this ruling by a Federal appeals court caused gold prices to rebound sharply, illustrating how quickly investor sentiment can shift in the face of new information.
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The US Dollar’s erratic reactions to these legal and policy shifts greatly influenced gold’s trajectory, underscoring the need for traders to stay vigilant and adaptable in this fluctuating landscape.
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By the end of the week, gold settled near $3,300/oz as traders braced for key economic data releases in June, hinting at the intricate dance between economic indicators and precious metal valuation.
This week’s shortened trading sessions were notably swayed by strategic investor moves reacting to high-profile headlines surrounding the Trump Tariffs—an area that has dominated discussions far more than budget negotiations in Washington lately. This shift highlights the direct correlation between tariff news and gold prices, primarily through its effect on the US Dollar.
Following Monday’s Memorial Day market holiday, Tuesday saw a significant sell-off, bringing gold spot prices from $3,340/oz down to approximately $3,310. Even with a slight recovery, demand was tepid, barely holding the $3,300 support level.
In an otherwise quiet week for macroeconomic data, traders were anticipating that gold might hover around this level, especially after an unexciting release of Federal Open Market Committee (FOMC) meeting minutes. However, everything changed on Wednesday afternoon when the US Court of International Trade declared that the Trump Administration lacked constitutional authority for many of its announced tariffs. The immediate consequence was a sharp rise in the US dollar, which inversely pressured gold prices, dropping them to a mid-week low of $3260/oz.
Gold’s dipping below $3,300 raised questions about whether it had genuinely become “cheap” in the eyes of investors. Just under 24 hours later, the Federal appeals court issued a temporary pause on the earlier ruling. This unexpected twist led to a rapid unwind of the sell-off, with gold rebounding as high as $3,325/oz before stabilizing back around the pivotal $3,300 mark as traders adjusted to the new situation.
Looking ahead, the headline frenzy surrounding the President’s trade policies may cool down now that the matter is likely headed to the Supreme Court. Traders should take note: the next week offers fresh macroeconomic data, including key ISM survey results and the May jobs report, which could further impact trading dynamics.
As we wrap up this week, let’s use the weekend to recharge. Next week, we’ll return with more market insights and updates to ensure you stay ahead in this ever-evolving landscape.