Gold Slides to One-Week Lows as Court Blocks Trump Tariffs, Dollar Surges

Gold prices extended their decline for a fourth consecutive day, hitting over one-week lows as easing trade tensions and a stronger US dollar diminished the precious metal’s safe-haven appeal.

International Markets:

• Spot gold: $3,268 per ounce (down 0.7% from previous session)
• US gold futures: $3,265 per ounce (down 0.1%)
• Gold hit its lowest level since May 20, touching $3,262.99 per ounce during Asian trading

Indian Markets:

Gold prices across major Indian cities showed uniformity in the decline:

Gold prices in India dropped around 0.74% on May 29. In Chennai specifically, gold decreased by ₹320 per sovereign, with one gram costing ₹8,895.

Previous Session and Overnight Developments

The primary catalyst for gold‘s decline was a US federal court ruling that blocked President Donald Trump’s “Liberation Day” tariffs, calling them illegal. The court ruled that the president overstepped his authority by imposing across-the-board duties on imports.

This development reduced fears of a trade war and boosted investor confidence in riskier assets, diminishing gold’s appeal as a safe haven. Nicholas Frappell, Global Head at ABC Refinery, noted: “The dollar rallied on the news, pushing gold lower”.

Global Market Impact

US Dollar Strength:

The dollar index jumped 0.5% to a more than one-week high, making greenback-priced gold more expensive for other currency holders. US Treasury yields also rose, further pressuring gold prices.

Asian Markets:

Asian shares and Wall Street futures climbed on Thursday, indicating improved risk sentiment and reduced demand for safe-haven assets.

European Markets:

Trade tensions between the US and European Union eased thanks to the US President’s postponement of plans to impose a 50% tax on EU goods until July 9.

Federal Reserve Insights

Federal Reserve officials at their May 6-7 meeting acknowledged possible “difficult tradeoffs” ahead, with rising inflation and unemployment, and warned about growing recession risks.

The minutes revealed concerns among officials regarding the possibility of simultaneous increases in inflation and unemployment. Market participants are awaiting US GDP data and Personal Consumption Expenditures (PCE) numbers for additional insights into potential interest rate directions.

ETF Flows and Market Activity

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported holdings rose 0.34% to 925.61 metric tons on Wednesday from 922.46 tons on Tuesday, indicating some continued institutional interest despite the price decline.

Technical Analysis

Support and Resistance Levels:

Rahul Kalantri, VP Commodities at Mehta Equities, identified key technical levels:

• Gold has technical support at $3,255–$3,240 per ounce
• Resistance at $3,300–$3,322 per ounce
• In India: support at ₹94,910–₹94,580 per 10 grams, resistance at ₹95,550–₹95,740 per 10 grams

Chart Analysis:

The 14-day Relative Strength Index (RSI) is testing waters below the midline at 49.50, indicating bearish momentum.

Gold buyers failed to defend the powerful demand area near $3,295, which was the confluence of the 21-day Simple Moving Average and the 38.2% Fibonacci retracement level.

The next critical support level is the 50% Fibonacci support near $3,230, where the 50-day SMA converges.

Market Outlook and Expert Views

Despite the current downturn, long-term fundamentals remain supportive. Frappell noted: “The longer-term perspective indicates a weaker dollar ahead, alongside likely inflationary pressures in the near future”.

Aksha Kamboj, Vice President of India Bullion and Jewellers Association, commented: “With reduced geopolitical tensions and a stronger dollar, gold may continue its downward trend in the near term. But long-term investors should see this as a buying opportunity”.

MCX Gold Outlook:

Abhilash Koikkara, Head – Forex & Commodities at Nuvama Professional Clients Group, stated that MCX Gold has resumed its primary upward trend after a brief consolidation phase within the 96,000–94,500 range, with prices poised to test the 98,000 level.

Other Precious Metals

• Silver: Rose 0.4% to $33 per ounce, though some sources showed slight declines to $32.93
• Platinum: Remained stable at $1,075.50
• Palladium: Rose 0.9% to $971.30

Year-to-Date Performance

Despite the recent decline, gold has shown remarkable performance in 2025, increasing 673.11 USD/troy ounce or 25.65% since the beginning of the year. The metal reached an unprecedented all-time high of $3,500 per ounce earlier in May, representing a 47.2% year-on-year increase.

The current correction appears to be a technical pullback from these historic highs, with fundamental drivers for gold’s long-term bullish outlook remaining intact, including ongoing economic uncertainty, geopolitical tensions, and inflationary pressures.

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